Austin airport is experiencing record passenger growth, and the terminal needs to grow along with it. So the city’s solution is to use eminent domain to acquire property they already own, by cancelling a lease that they themselves signed. It’s a strange use of the government takings power, which underscores that the city never keeps its word and anyone investing $12 million dollars in a city project does so at their own risk.
Part of how the Austin airport has handled growth so far is by opening a separate, privately-funded terminal for low cost carriers. They gave a 40 year lease to a company to build it, that company has invested tens of millions of dollars, and Allegiant and Frontier currently operate out of the terminal.
The South Terminal has only been open 5 years and the Austin airport has changed its mind. They want the land back to reconfigure how the airport works as part of a new expansion plan.
- They offered less than $2 million to buy out the lease (!)
- And they’re moving forward with eminent domain to take back the land (that they already own).
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. Yet it’s the strangest eminent domain case.
- Eminent domain is supposed to allow government to forcibly take private property, with compensation, for a public use. Here they are trying to take public property that they already own.
- In effect, the taking the city is pursuing is of the contract that allows the private company to operate on airport (city) land.
- But it’s not a private contract as such – it is the contract they themselves agreed to. They want to use eminent domain to let them cancel a lease they signed. It basically makes the City of Austin untrustworthy as a counterparty.
Since it’s the contract that the city wants to take through eminent domain, and eminent domain is supposed to require just compensation, the private group which operates the terminal is now suing for the value of the contract. It’s really just a leverage play, but they say the contract contemplates their participating in the future growth and development of the airport and that now looks to be worth hundreds of millions, so…
Airports without a real independent governing body tend to be poorly run. Reporting to the City Council as ultimate decision-maker leads to bad outcomes, not just in Austin but also in places like Miami. Everything at the Austin airport is a political process as a result. For instance,
- The airport has grown so much they need more fuel storage. It carries less than half the fuel it needs for its size so airlines had to tanker in fuel, bringing it in themselves, since expanding storage meant getting the city council’s ok – the National Environmental Planning Act is enough of a veto over U.S. infrastructure, neighborhood activists going to petty elected officials to slow things down can be even worse. Fortunately that finally seems on a better path.
- But the city council even killed a Centurion lounge for the airport because of indecision over whether a Priority Pass lounge would be better for minority contracting goals, and the airport got neither one. (There’s still space – I hold out hope!)
Austin is a great, growing city. Rents are up 86% year-over-year. It’s now the 5th most expensive rental market in the country right behind San Francisco and ahead of Chicago, Philadelphia and Miami. There was a reason that everyone moved here and it holds onto the slogan ‘Keep Austin Weird’ but the more it grows the less ‘weird’ it becomes.
Home prices are high because of land use restrictions. It’s not like the island of Manhattan, where there’s only so much land and they’ve already built up (which itself could do better). There’s plenty of land. But rules are tight and permitting costly and time-consuming. There’s been a somewhat-fixed supply of housing as people have flocked to the area. That’s driven up housing costs (they’ve gone up everywhere in part due to low interest rates, but they’ve gone up far more in Austin). Grimes knows.
The Austin police department has quiet quit over contract disputes with the city, too. They no longer respond to many calls, even where crimes are in progress. I used to think Austin city government was just regular old incompetent and sort of corrupt. But it turns out it’s even worse than that. They say an honest politician is one who stays bought. But here in Austin they renege not just on their word, but on their signed contracts.
Is Austin, TX the exception or the new rule for cities in Texas. With the inability to collect state income taxes, and the need to improve not just their airports but other in fracture, I do not see what Austin just did considering other issues that unusual. It’s not just doing business in Austin, but do you really want to move to Texas today?
The people get the politicians they deserve. If it’s so bad, vote em out.
Texas.
Essentially all meaningful economic activity, hence, all smart and reasonable people, in America, live on the coasts. Flyover country gets the scraps. To this day I’m not sure why Gary Leff moved there from DC.
To say you live in Texas, or any state other than a coastal one, is to announce you’re a loser. That is how our country is.
Metros that contain people who are not losers:
Seattle, WA
San Francisco, CA
Los Angeles, CA
Boston, MA
New York, NY
Washington, DC
— FIN. —
That’s it. Everybody who’s somebody lives in one of the above metro areas. There are some exceptions but not important right now. And to be sure there are all kinds of losers in the above cities. The problem is that in other cities, the entire city is losers.
@Olaf: A meaningless and absurd comment that adds nothing to the discussion.
What I find interesting is that now that California and the Northeast are super expensive, everyone at first welcomed them elsewhere (Austin, FL, Mountain States, etc.) but the cost of living in these ‘second’ destinations has now exploded. Will Austin be attractive at SF prices? For me personally, no.
Austin has been infected by wack-job liberals. It will soon be just as disgusting as San FranShitHole.
all of the listed cities/states are liberal democrats, is it a pure coincidence or something can be drawn from it? dont know about Austin…just that they are paying 8 mil to convert an existing hotel to homeless shelter with health care included, seems pretty friendly
This is what happens when Californians infect once nice places. Trump’s ONLY failing was not constructing the wall right up the border California has with AZ and NV.
The actual problem that needs to be addressed is the fact that the airport DOES need to grow. Building the South Terminal was a fine idea 6 years ago, but it should have only ever been viewed as a stopgap, certainly not a 40-year solution. Unfortunately it’s hard for me, as an Austin resident, to feel that bad for the corporation that operates the South Terminal. I wish they weren’t getting screwed by the local government, but I’m also tired of having to wait 30 minutes for a gate every time I land.
Olaf that’s a wildly absurd comment and I demand you retract your statement that Boston is not full of losers immediately.
Why do liberals always claim they want to help the working class and homeless and the poor, but also the most liberal cities have the most restrictive building codes in the country? How have they fooled so many people for so long? They want your tax money for affordable housing, but just don’t want “those people” living in their neighborhood. I feel a reckoning coming and I know the liberal elite feel it too.
Plenty of comments here confirm what an awful, whiny, sad cesspool of stupidity America has become. Glad I gave it up and my citizenship and moved abroad when I did. What a sad place.
Ah yes, the oft-overlooked but terribly useful Contracts Clause of the U.S. Constitution. Austin is going to have a lot of trouble arguing eminent domain over a contract that itself signed. SCOTUS held in U.S. Trust v. New Jersey back in the 70s that the state couldn’t modify its own bond sale agreement because it didn’t like the deal the state itself had made. I can’t see the city winning this one without paying out.
Democrats are why you should never do anything with the city of Austin.
@Bob
Texas has more people moving to it than any other state in the US.
When you try to emphasize the word “contract” but end up misspelling it as “contact”, it undermines your efforts. Is it so hard to proofread your work?
Fellow Austinite here…
Gary, I sure wish I could say you were wrong… but you are very right (sadly).
Austin has some real problems right now and it will take years to get them fixed.
The police & 911 problem is an understated issue. Calling 911 only to stay on hold for 15+ minutes makes you realize that you are on your own when bad things happen.
BTW – as far as the Democrat / Republican crap… we’ve got our share of bad politicians – on both sides of the aisle.
I moved here 8 years ago as a place great for retirees. That was such a lie The average age in Austin is 35.
It’s so hard for senior to make friends here.
I am disappointed here and will be moving to California next year.
If you really think Abbott is a great Governor I feel bad for you.
And where are all these liberals that the idiot above is talking about? Last I knew it was aRed state run by crooked Republicans. I.e. Ted Cruz for one.
I wish we never moved here.
The city has changed so much and not for the better.
What ever happened to Howdy ya’ll and Thank much?
Why are there so many comments about (mostly) democrats and republicans on here? This is a post about the damn airport! So many losers in these comments. Get a life will ya?
This country is so far gone, complete morons thinking everything is this or that with nothing on between. If you wear your politics like terrible tattoos, you need to reassess your life. None of them care about you and they all have more money than you, why serve them? Life your life like a normal person, sheesh
Simply, South Terminal needs to go for the airport to properly expand. All that’s left is how much we’re going to have to pay the operator to make it happen. Hard stop.
A regional airport in San Antonio would be Awesome. I know of numerous people from San Antonio who fly out of the South Terminal in Austin. We hope San Antonio takes advantage of this opportunity! 🙂
We had people in my family living in Austin from 1928 until 2021. We’ve all left.
It used to be the honest kind of liberal with some old hippies thrown into an eclectic but interesting mix. Now it’s California liberals that try to tell everyone else how to live. If you need proof just read the message above mine.
The City Council represents the few that bother to vote on those positions. They’re killing Austin.
Jerry is right on – the city has allowed too many flights to operate within its current flight capacity. Planes waiting for a gate to open happens multiple times a day. Last flight I took on Southwest left and landed on time but we sat on a taxiway for 45 minutes waiting for a gate to become available. No one is taking responsibility- not even the airport director. Not to mention how disgusting the janitorial situation is……
Rod – Good Riddance. Go back to California.
Olaf – Really? What about Chicago, Philadelphia, Miami, Houston, & Dallas? Your a troll. ~ FIN.
Gary – This is SPOT ON. I hope Austin gets less and less bids from companies looking to do business with honest actors. Everyone always wants to base corporations even when they are the ones that make things happen. Let the Austin City Council build and operate everything themselves!
@playingcards
So right you are.
The data point about Austin’s rent being the “fifth most expensive in the country” is not correct; Dwellsy’s data was terrible for that. Tons of counter-arguments were made on Twitter but just the fact that they based the entire thing only on listings on their own website means it’s not something you can realistically use to make sweeping generalizations. Everyone that actually lives and rents here knows that while it’s certainly gotten more expensive here the “median rent” is nowhere near $3000 which is what Dwellsy claimed (and national people who didn’t know any better like Axios parroted for them)
Austin not trustworthy? Considering it’s politics, the bad outcome at the airport is normal. As gomer Pyle said “ surprise surprise” So for all you coastal Democrat texas haters, keep on hating. I’m involved in real estate development in the far north suburbs of Dallas. The prosperity flows unabated. And we will keep stealing your companies until all you have left are homeless fecal droppers, state and federal pensioners, welfare recipients and other unproductive types. In short, I am a coastal business thief and I love it.
@chad Every time you post on this “frequent flyer advice” website, it adds nothing to the conversation except to spew out your hateful loathing of any person who does not think the same as you. Go and spew out your hate on Truth Social or some other social media website that caters to narrow minded people like yourself. PLEASE.
Interesting insights, Gary. Thanks for sharing.
Austin City Council has had a reputation for being hostile to businesses for many, many years.
Hey Fokker,
Nice theory…
But…the Gulf border Texas. Also, Bush 1&2, Warren Buffet, Jeff Bezos, Larry Page…none of which born in coastal areas, also reasonably important.
This has been in the long term plans forever. It was an open secret if you will. Low level airport employees were talking about it. If they didn’t know this was coming, they didn’t do their homework. Literally the baggage guys knew it was going to happen.
It’s happening faster than anticipated because of how fast austin is growing, but they are moving these plans up 20yrs, maybe 5.
When I moved to Austin (sight unseen) in 1974 for grad school, it was known then that the airport needed to move from its then cramped facility off I-35. At least four “studies” costing millions of dollars each were commissioned, all while it was known that Bergstrom Air Force Base was being decommissioned – with two 12,000 foot runways, only six miles from downtown, with nobody living in the flight paths. Seems to me that not much has changed! Why would ANYONE in a growing city sign a 40 year lease with temporary structures? There can be only two answers – stupidity or graft.
One wonders how you can build two giant garages 100 yards from the terminal without providing a single covered walkway for when it rains. The airport is bursting at the seams now that people actually connect in Austin – but so many concessions have been added there isn’t enough space for patrons to sit.
Oh, and if somebody spent $12 million on the “South Terminal” – well, perhaps they’d be interested in buying that oceanfront property in Arizona. WHAT A DUMP! Seems like anyone with a lick of sense could make better decisions!
Their no-bid master concessionaire contract to delaware north reeks of kickbacks and their refusal to accept that they run it to the benefit of the consttuents. A last public common.