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Local concessionaire asks Austin airport commission for rent abatement after South Terminal lease dispute
Summary
A local restaurateur who operated a concession at AUS’s South Terminal told commissioners he invested $650,000 and employs 25 people but faces losing the space after a landlord dispute; he asked the commission for rent abatement under $200,000 to bridge through the end of his contract.
Steven Shallcross, a longtime Austin hospitality operator, told the Austin Airport Advisory Commission that his company invested $650,000 to build and operate a concession at the South Terminal and now faces business and debt pressures after a lease dispute removed his landlord role and left the concession without a guaranteed place in the new terminal.
Shallcross said he opened the South Terminal concession in July 2018 after signing a lease in December 2017. He told commissioners he and his firms employ about 25 people at the South Terminal and that the concession’s “capture rate” — the share of terminal visitors who made purchases — rose from about 50% to roughly 78% under his management in the first six months. He said his average ticket price exceeded $8, more than doubling prior results.
Shallcross said the business took on significant debt during the COVID-19 period to stay open. “We had to borrow $2,000,000 from the federal government and the IDL money,” he said, adding that he still carries about $1.9 million in federal debt and that his company received none of several recovery or hospitality-targeted grants it expected: $2.2 million in restaurant-recovery funding and a $250,000 state hospitality grant were not received because the funds were exhausted before his application was processed.
Why this matters: Shallcross told the commission his investment and the concession’s local employment are at risk because the airport’s redevelopment does not guarantee a transfer of his current space into the new Barbara Jordan terminal. He said he was invited to bid on the new terminal concessions, with bids opening next year for spaces that would not be operational until about 2030, which he said he and his employees could not realistically wait for.
Shallcross asked the commission to explore “abated rent” measures to help bridge the period between the current lease term and the new concession rollout. He estimated the amount needed to be “less than $200,000.” City staff present at the meeting conveyed that some airport representatives had told Shallcross any financial accommodation would have to be available consistent with what the airport could offer any similarly situated concessionaire.
Commissioners and the chair thanked Shallcross for speaking and expressed sympathy. The chair said he would personally visit the concession and follow up; no formal action or commitment was recorded at the meeting.
Ending: Shallcross said he and his staff were available for follow-up conversations; commissioners signaled interest in learning more but did not vote on any specific relief at the meeting.
