This is a little bit insane. In 2015 Austin entered into a 30 year lease so that a private company could build a second airport terminal. The ‘South Terminal’ also has two 5 year extension options built into the lease. But the city wants to use eminent domain to terminate the lease, because it now prefers to expand the main terminal.
Austin airport has two terminals, the Barbara Jordan Terminal which is what most people know and the South Terminal which is nearly an 8 mile drive away. All day long passengers go to “the Austin airport” and get dropped off a the Barbara Jordan Terminal.
The low cost carrier terminal is less than three quarters of a mile away but there’s no easy way to get there from the main terminal. Spirit Airlines is willing to pay extra so that its passengers can avoid the experience of a double wide trailer with a food truck.
The South Terminal is 30,000 square feet and opened in 2017. Allegiant and Frontier operate out of the terminal, and Allegiant built a $75 million base. The city says,
- They need the land back in order to build an expansion of the main terminal
- They don’t care that they entered into a lease
- They’re willing to pay the owners $2 million, against a build cost that was six to ten times that much (depending on reports)
Austin plans to use the state’s eminent domain laws to seize land that it already owns basically arguing that eminent domain allows it to renege on contracts that it has signed (effectively, no contract for work on city property is enforceable). Say what?
“There is some precedent to say (the government) can’t use eminent domain simply to take over a business that it had already contracted to allow someone else to do,” [an eminent domain attorney] said.
Usually, eminent domain is used to seize property for a public use. In this case, the city is trying to terminate a lease on its own property.
“That’s a very atypical scenario,” said Luke Ellis, an eminent domain attorney who teaches at UT Austin. “Usually the condemning entity is not the owner.”
It seems to me when you want out of a contract, you offer the counterparty a deal good enough to get them to agree to do so. In any case, eminent domain is intended to avoid the situation of a single holdout landowner from scuttling public plans – when everyone is being offered true fair value for their property. Here there’s just one private party involved, being offered a pittance, to give up a use that the city explicitly authorized.
The city’s plan is to close the South Terminal in summer 2023 as part of their plan to build a midfield concourse with at least 10 more gates, connected to the Barbara Jordan Terminal via underground tunnel. This requires relocating the terminal’s taxiways, and using space currently occupied by the low cost terminal. They’ll also introduce a $77 million baggage system and new ticket counters.
The Austin airport isn’t large enough to support its – and the city’s – growth, despite expanding Barbara Jordan terminal gates by 37% and opening the second South Terminal. And TSA security screening is severely understaffed. Unfortunately the city’s solution shows everything that’s wrong with Austin.
It’s part of broader mismanagement at and around the airport where catering facilities aren’t fully operational, and airport vendors don’t open due to lack of staff, yet the airport doesn’t enforce lease requirements.
And we don’t have an American Express – Escape lounge because the city council ditched the effort based on a frivolous contract dispute by the operators of The Club lounges (giving passengers neither). Why oh why is this airport even owned by the city?