AUSTIN (KXAN) — The Austin City Council on Thursday voted to authorize the start of eminent domain proceedings to secure a leasehold agreement needed for a sweeping expansion of Austin-Bergstrom International Airport (AUS).

The targeted property is home to the South Terminal which is operated by LoneStar Airport Holdings, a private company. The terminal offers three gates for ultra-low-cost carriers Allegiant and Frontier.

As KXAN has reported, the Austin airport — which is experiencing unprecedented travel numbers as the city grows — is looking to build a new mid-airfeld concourse as part of its 2040 master plan.

The new concourse would offer 10 or more additional gates and would be accessible via an underground tunnel from the main airport building. Airport officials hope to have it ready by 2028.

The South Terminal would need to be demolished in order to relocate the current aircraft taxiways for construction of the new concourse, according to a 2021 memo from Austin-Bergstrom CEO Jacqueline Yaft.

The city entered into a decades-long lease and concession agreement with LoneStar Airport Holdings in March of 2016. City documents state both sides were unable to reach a sale price for the airport to acquire the land.

The city is slated to pay the company $1.9 million for the property, its current appraised value, according to city documents.

In a statement ahead of Thursday’s vote, LoneStar Airport Holdings CEO Jeff Pearse insinuated his company would take legal action.

Pearse said the use of eminent domain could “result in years of expensive, time-consuming litigation, delaying expansion plans even further and sending a signal to every business in Austin that making major investments alongside the city is a dangerous bet.”

Austin-Bergstrom officials declined interviews Thursday but provided KXAN with the following statement:

“The Department of Aviation continues to progress with airport improvement projects to deliver an improved passenger experience for all AUS customers and increase capacity for more flights through the Airport Expansion and Development Program. A vital component of the Program is the development of the new midfield concourse, which necessitates the future closure of the South Terminal. The Department of Aviation will continue to work with all business stakeholders and tenants throughout the duration of this program and looks forward to delivering an improved passenger experience to all AUS customers.”

Austin-Bergstrom International Airport

Editor’s note: This story has been updated from a previous version to reflect the Austin City Council’s vote.