City Council Approves $88 Million Settlement in South Terminal Case

June 14, 2023

Austin City Council recently approved a settlement of $88 million for the taking of the leasehold at the South Terminal at Austin-Bergstrom International Airport from Barron, Adler, Clough & Oddo client LoneStar Airport Holdings — a payout 46 times larger than the amount the City initially offered in 2022 as it sought to terminate the company’s long-term lease.  

The initial offer prompted LoneStar to sue in federal court as well as in Travis County Probate Court, arguing that the City’s $1.9 million valuation failed to reflect the true value of the LoneStar 40-year lease, which still had 34 years remaining.

The City was ordered to pay LoneStar $90 million in February by the Special Commissioners in a hearing handled by BACO, which the City appealed. Last week’s settlement effectively ends LoneStar’s two lawsuits against the City as well as its long-term lease of the South Terminal, enabling the City to move forward with its planned expansion of the main airport. 

The settlement will be paid by Austin-Bergstrom International Airport’s general fund, which is separate from the City of Austin’s general fund and receives no local tax dollars. Management and operations of the South Terminal will be transferred to the Department of Aviation this fall. The facilities will remain operational until 2025 when construction of the new concourse begins.

Understanding Full Property Value May Help Acquire Larger Awards

The Texas Constitution dictates that property owners are entitled to receive “adequate compensation” for any land taken for public use, but determining fair value involves more than agreeing upon a simple dollar-per-square-foot value of the land taken. 

The LoneStar case is a good reminder that property owners must know their rights and advocate for themselves during condemnation proceedings to ensure a fair outcome.

Barron, Adler, Clough & Oddo, PLLC has focused exclusively on representing Texas property owners for more than 35 years with more than 100 years of combined eminent domain experience. Contact us to learn more about your property rights and how we can help secure fair value during takings proceedings.