On Dec. 1, City Council approved an additional $1.5 million in legal services for representation of the city in two ongoing lawsuits between Austin and Lonestar Airport Holdings LLC regarding the closure of the South Terminal at Austin-Bergstrom International Airport.
This is the fourth amendment council has approved to the legal services agreement. The city’s spending stood at $250,000 in August 2021 and now totals $3.1 million.
This is more than the city’s initial offer to Lonestar in April to end the remainder of its 40-year lease on the terminal that began in 2017 for $1.95 million. Lonestar rejected this offer.
After the rejection, Austin moved forward with an eminent domain lawsuit to acquire the South Terminal in June. In response, Lonestar Airport Holdings filed a federal lawsuit, citing unjust compensation and a breach of contract.
“The city’s Dec. 1, 2022, outside counsel budget increase came after LoneStar filed a federal lawsuit in response to the city’s legal action to acquire the leasehold,” ABIA spokesperson Sam Haynes said in a statement. “Both lawsuits are ongoing.”
In 2019, the city approved the 2040 Master Plan for Austin-Bergstrom, which includes more than 60 projects to expand and make improvements to the airport.
As part of the master plan, the city is seeking to take over the South Terminal, leased by Lonestar, to close and demolish the terminal and make room for additional airport improvements.
“The city continues to move forward with acquiring the leasehold through condemnation, a necessary step to increase capacity for more flights at [ABIA] through the Airport Expansion and Development Program,” Haynes said in a statement. “A vital component of the program is the new midfield concourse, which necessitates the future closure of the South Terminal.”
The additional funding is available in the Department of Aviation’s operating budget for fiscal year 2022-23.
"The litigation and legal fees are regrettable and unnecessary. 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 upon reasonable terms reflecting our existing 40-year agreement," Jeff Pearse, Lonestar Airport Holdings CEO, said in a statement.
