Legal bills are piling up in the city’s fight to oust the company running the South Terminal at Austin-Bergstrom International Airport. City Council voted Thursday to double ABIA’s legal services agreement with corporate law firm Winstead PC to more than $3 million.
The move comes after the company with a 40-year lease to run the South Terminal, Lonestar Airport Holdings, sued in federal court in an attempt to stop the city from forcing it out through the use of eminent domain.
Thursday’s Council vote was taken without discussion. The money for legal services is coming from ABIA’s operating budget, which is funded by airport revenue.
Only two airlines – ultra-low-cost carriers Allegiant and Frontier – operate out of the South Terminal. More than 38,000 passengers traveled through the facility in September, compared to 1.7 million travelers through the main Barbara Jordan Terminal.
Officials who run the city-owned airport want to bulldoze the South Terminal to make room for a new concourse with space for up to 40 gates, connected to the main terminal by an underground walkway.
ABIA’s planned $4 billion expansion includes a new midfield concourse with at least 10 gates, connected to the Barbara Jordan Terminal through an underground tunnel. The expansion would push into land now occupied by the South Terminal. Photo by city of Austin.
In a novel use of eminent domain, the city is attempting to seize the lease of city-owned land from Lonestar and pay $1.9 million compensation.
Lonestar said it found the city’s offer of less than $2 million “offensive,” arguing it spent more than 10 times that amount fixing up the facility. Now, the company is waging a two-front legal battle against the city in Travis County Probate Court and federal court.
The South Terminal before renovation. The image was included in a federal lawsuit filed by Lonestar Airport Holdings. Photo by Lonestar Airport Holdings.
The vote to boost the airport’s legal war chest to $3 million means Austin is now spending 58 percent more on lawyer bills than its rejected offer to Lonestar.
The increase in legal costs “came after Lonestar filed a federal lawsuit in response to the city’s legal action to acquire the leasehold,” ABIA said in a statement to KUT, calling the addition of a new midfield concourse “a necessary step to increase capacity for more flights at AUS.”
Lonestar Airport Holdings said the city wouldn’t have to spend so much on lawyers if it had offered “reasonable terms reflecting our existing 40-year agreement.”
“We’re eager to continue to be a good partner to the city, to foster further development of the airport and to resolve this dispute,” Lonestar CEO Jeff Pearse said in a statement.
U.S. District Judge Robert Pitman has set a hearing on the case for Jan. 20.
A waiting area inside the South Terminal. Photo by Gabriel C. Pérez/KUT.
This story was produced as part of the Austin Monitor’s reporting partnership with KUT.
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Austin City Council: The Austin City Council is the body with legislative purview over the City of Austin. It offers policy direction, while the office of the City Manager implements administrative actions based on those policies. Until 2015, the body contained seven members, including the city's Mayor, all elected at-large. In 2012, City of Austin residents voted to change that system and as of 2015, 10 members of the Council are elected based on geographic districts. The Mayor continues to be elected at-large.
Austin-Bergstrom International Airport: Run by the city, the Austin–Bergstrom International Airport is located on the old site of Bergstrom Air Force Base it opened to to the public on May 23, 1999.
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