AUSTIN (Talk1370.com) -- Austin City Council members approved an $88 million settlement Thursday, resolving a legal dispute with a city contractor over the South Terminal at Austin-Bergstrom International Airport and a key stumbling block in the ongoing efforts to expand AUS.
The $88 million settlement resolves two lawsuits between Lonestar Airport Holdings, LLC and the city's Aviation Division - one in federal court, and another in a Travis County district court.
City officials say the settlement, along with the rest of the airport's expansion program, is being funded through the airport's general fund - which receives revenue from airport operations, airport revenue bonds, and federal grants. No Austin taxpayer dollars are being used to fund the program.
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Lonestar signed a 40-year contract with the city in March 2016 to operate the South Terminal, which was aimed at ultra-low-cost airlines. Allegiant and Frontier currently operate from the facility, with Nebraska-based Red Way set to begin service later this month.
As the airport's expansion program has moved forward, officials decided in June 2022 to terminate Lonestar's contract and offered the group $1.9 million in exchange for the early termination.
The city then moved to use eminent domain to take over the property; a panel of commissioners in Travis County's Probate Court ruled in February that the city should pay Lonestar $90 million for the value of its improvements to the terminal facility and other investments.
According to the city, operations will continue as normal at the South Terminal, with operations transferring to city control later this fall. The South Terminal facility will remain operational until its removal is required for the expansion project, which is anticipated to occur in 2025.