Austin will move ahead with a lawsuit aimed at acquiring Austin-Bergstrom International Airport's South Terminal to clear the way for a long-term expansion of the travel hub.

Eminent domain proceedings approved by City Council on June 16 seek to take over the South Terminal property from its owner, LoneStar Airport Holdings. As part of the city aviation department's Airport Expansion and Development Program, the 10-gate facility currently home to Frontier and Allegiant airlines would be shuttered years after it first opened to clear the way for other airport improvements.

While most of the airport is already owned by the city, Austin entered into a 30-year lease agreement for LoneStar's operation of the South Terminal in 2016. The terminal property is currently appraised at $1.95 million, according to the city.

Austin's proposal to buy the terminal at that value earlier this year was deemed "offensive" by LoneStar, and its CEO said this week the city is acting in bad faith through its "wrongful" push to close the terminal and further stress the busy airport.

"At a time when the airport needs more gates and terminal capacity than ever before, airport leadership believes the best course of action is to demolish the South Terminal and squeeze two more airlines, 25,000 more flights and more than a million additional passengers per year into the already overcrowded Barbara Jordan Terminal—all at a time when disruptive works to optimize the Barbara Jordan Terminal are underway," LoneStar CEO Jeff Pearse told Austin's Airport Advisory Commission on June 14. "The proposed taking of LoneStar’s business interest through eminent domain will be risky, time-consuming and an expensive undertaking for the city.”

At the same commission meeting, Aviation Department CEO Jacqueline Yaft said eminent domain is a necessary step for the airport's future that will improve operations.

"The relocation of the airlines operating at the south terminal to the Barbara Jordan Terminal will not decrease the service and benefits that passengers have come to expect from AUS. Opportunities for relocating South Terminal tenants and their employees to the Barbara Jordan Terminal are also being explored," Yaft said. "The department of aviation looks forward to working with each tenant on a customized transition plan. These changes will fulfill the goals of building a better AUS for the future while delivering and upgrading passenger experiences."

In addition to the eminent domain proceedings, council also signed off on a $46 million contract for construction services to add more gates at the Barbara Jordan Terminal plus $8 million for engineering services related to the airport expansion.