Austin's legal costs to oust the South Terminal's operator double to $3 million
Legal bills are piling up in the city's fight to oust the company running the South Terminal at Austin-Bergstrom International Airport. Austin's 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 at 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.
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 vote to boost the airport's legal war chest to $3 million means Austin is now spending 58% 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.