February 2022

Up, Up and Away, Someday! The Austin Bergstrom Airport expansion may no have wings.

Austin has just over two million people in the metro area and is growing fast.
Its airport is insufficient for such a population. As a result, the City has a plan for expansion.
Unfortunately, a public/private partnership contract may hold up those expansion plans.

Austin – well, Central Texas in general – is growing like crazy. We all know this. Its one of the most popular topics for Austinites to talk about – right after property taxes and SXSW. The growth is great for the area – no question. But it brings its own issues. One of the biggest of those issues is transportation. That includes the terrible traffic around the city. And it also includes getting to and from Austin.

I’ve written a couple of times in this blog about the drastic need for expansion of our airport. Its just not sufficient for the population we have now – much less what is coming. Well there was a new development about airport expansion in the last couple of weeks. So that’s what we are going to talk about this week – what’s the latest on the Austin airport?

What is the Current Austin Airport Expansion Plan?

At the last census, there were just over two million people living in the Austin metro area. That makes it the 28th biggest metro area in the United States. Despite that, our airport currently only has 34 gates. This is, obviously, simply not sufficient to adequately serve our current population. And, as written above, the area is growing fast.

Thankfully, area leaders recognize this problem. As a result, they have enacted the 2040 Master Plan to expand the Austin-Bergstrom Airport (“ABIA”). According to the plan, they expect to have 31 million passengers annually through ABIA by 2040. To meet this demand, Austin plans to expand to 64 gates by that time – almost doubling the current ABIA capacity.

In addition to the gate expansion, they also plan to make major renovations to the current main terminal. This will include upgrading the terminal and making it more accessible for the increase in passengers.

Finally, they also plan to add ten new gates to a new midfield concourse – with it ultimately growing to 32 total gates.

We can argue over whether these measures are sufficient for the growth we will see in the future. I suspect that will just help us tread water. But at least there is a plan to expand.

What is the Problem with the Current Expansion Plan?

Unfortunately not all of the expansion news is positive. Remember I said there was a new development in the expansion plans? This is where the bad news comes in.

As you probably know, ABIA currently has a second terminal – the South Terminal. It has 6 gates and serves low fare carriers. When it was opened, Austin contracted with Lonestar Airport Holdings LLC to operate the terminal. It touted this as a highly effective and productive public/private partnership.

Austin and Lonestar agreed to a forty-year lease for Lonestar to operate the South Terminal. Well apparently the City signed that lease without considering what expansion plans would be required.

The plans we talked about above – the 2040 Master Plan – includes tearing down the South Terminal and building the new midfield terminal. But, of course, Lonestar has that forty-year lease. And it is not keen on losing its business. As a result, it has told Austin that it has no intention of letting the City out of the long-term lease.

So what does that mean for future airport expansion? I am not sure anyone knows right now. Currently Austin and Lonestar are in negotiations about what to do about the lease. Its not clear if these negotiations will be fruitful or if this will ultimately lead to lengthy litigation. As a result, we do not know if the plans will be delayed.

One thing I think we can be sure of, though. The much needed airport expansion just got quite a bit more expensive than the City anticipated.

Phil Better not be Talking About Texas

Leave a Comment / Insurance Disputes / By Sean Bukowski

Winter storms can often bring property damage, requiring the property owner to file an insurance claim.
Insurance companies have increasingly been demanding appraisal to resolve contested insurance claims.
We generally do not like appraisal because we lose control of the claim and may be stuck with a bad result.

It was Groundhog Day last week. And Punxsutawney Phil saw his shadow – which means there will be six more weeks of winter for our friends up north. Here in Texas, unfortunately, we were hit with about sixty hours of brutal weather. And as far as I am concerned, that’s more than enough.

Much like Bill Murray waking everyday to Sonny and Cher, the news of a coming winter blast sent shivers down the spine of every Texan. We just could not deal with another meltdown like we had last year.

Well as I sit here writing in the middle of our winter weekend, I am once again sitting without hot water. That’s because I have an exterior tankless water heater and something is frozen out there. I am sure I will be disappointed but for now I am hoping that, when it thaws, it does not explode like last year.*

But if it does, I will have to once again file a claim with my insurance company. What was that like last year and what will it be like this year? That’s what we talk about this week.

What do You Need to do to File a Property Insurance Claim After a Storm

We have been over this before in this blog so I will not going into great details what you need to do to file a property insurance claim. But I do want to give the highlights.

The first step is to contact your insurance broker and get him or her to file a notice of claim with your insurance company. And please make sure that the language on the notice is broad and contains all of the possible damage and causes of that damage.

Once the Notice is sent to the insurance company, it has a very short time in which to respond. It is required by law to promptly respond and evaluate your claim. As a result, it will likely quickly accept or deny your claim and provide an estimate of the damages.

You do not, however, need to accept the insurance company’s estimate of damages. And while there are multiple ways to protest the insurance company’s valuation, today we are going to focus on appraisal.

Is Appraisal Right for Your Property Insurance Claim?

In the last few years, appraisal has gotten significantly more popular with insurance companies. Under a standard property insurance policy, either the insurance company or the property owner may demand appraisal if the parties cannot agree on the amount of damages. Once a party demands appraisal, both the insurance company and the property owner each separately appoint an appraiser who develops his or her own estimates of the damages. They will then try to work out between themselves what they think the damages should be.

If they cannot agree on the amount of damages, then they will need to hire a third, impartial umpire. The umpire will then also analyze and estimate the amount of damages. Once two of the three appraisers agree on what the damages should be, the claim is resolved for that amount.

What are the Pros and Cons of Appraisal?

Overall, we are not big fans of an appraisal process. I will explain why next but first lets look at the positives of appraisal.

The biggest potential benefit is speed. Assuming you have good appraisers involved, the appraisal process should not last longer than a few months for most property insurance claims. As a result, as a property owner you may be able to get the insurance company to fund the necessary repairs fairly quickly.

But the downside is that you are giving up all the control over the claim. You are completely at the mercy of the three appraisers – two of whom you did not hire. And if they decide that the claim is not worth what you think it should be worth, you are likely still stuck with the result of the appraisal.

As a result, we prefer to keep control of the claim and negotiate directly with the insurance company on your behalf. Sometimes that means going forward with litigation against the insurance company. And while that may take a little longer, it is often a better result for the property owner.

* Good News – the pipe explosion was small and my friendly plumber fixed it over the weekend.

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