Austin sued for seeking ‘hostile takeover’ of airport terminal

The operator of a terminal at the Austin airport is suing the Texas city over its plans to raze the building and terminate a 40-year contract, saying condemnation proceedings are illegal and the city’s compensation offer is an insult. Lonestar Airport Holdings, based in New York, says it spent spent more than $32.5m after signing a contract six years ago to revive a largely abandoned auxiliary terminal at Austin-Bergstrom International Airport, which it turned into a base for ultra-low cost carriers Frontier Airlines and Allegiant. The company says it’s helped ease congestion at the main terminal, which is struggling to cope with a surge in passengers this year. But the city now wants to end the lease 34 years early and bulldoze the smaller building to facilitate an expansion of the main terminal. Lonestar found itself shut out of that plan, offered a take-it-or-leave-it $1.9m check attached to notice of condemnation plans. “The city cannot rewrite a contract that it voluntarily entered into merely because a new administration has a different view as to the desirability of public-private partnerships, especially after reaping the benefits of that partnership,” Lonestar’s lawyers said in their complaint. “And it certainly cannot take Lonestar’s business without honoring Lonestar’s Fifth Amendment right to just compensation.” Like much of the city, Austin’s airport has struggled to keep pace with a surging population after a series of corporate relocations to Central Texas, including the headquarters of Tesla Inc. and Oracle Corp. Amid warnings about long wait times to get through security and traffic congestion at drop-off and pick-up sites, the airport expects to serve more than 20m passengers this year. It set a record with more than 2m passengers in May, up some 40% from the same month four years ago. The South Terminal where Lonestar operates accounted for just 3% of airport traffic in June, or roughly 60,000 passengers. <br/>