Pappas Restaurants Shown The Door At Hobby Airport After Council Awards New Contract
Despite a high-profile public relations campaign that included plastering social media with requests to sign a petition and "Save Pappas at Hobby Airport" signs at its restaurants around the city, Pappas Restaurants will move out of Hobby Airport after a Houston City Council vote Wednesday.
The council approved a new 10-year, $470M contract with Areas, a subsidiary of Spain-based Areas SAU, to provide concessions at Hobby Airport. Areas scored four-tenths of a point higher than Pappas during a procurement process, one that was both criticized and defended during Wednesday morning’s meeting.
Pappas is a Houston-based chain with 51 restaurants in the Houston metro area, including Pappasito’s Cantina and Pappadeaux Seafood Kitchen.
Pappas has operated in Hobby Airport since its joint venture, Four Families, won a contract in 2002. That contract is set to expire, meaning the five Pappas brand restaurants in Hobby Airport will move out in the next two years.
Areas has offered a tentative lineup of restaurants that includes local fare and national chains: The Spot, Killen's BBQ, SpindleTap Brewery, Starbucks, LongHorn Steakhouse, Yard House, Pei Wei Asian Kitchen, Throughgood Coffee and Clutch City Coffee, the Houston Chronicle reported.
More than 50,000 people signed an online petition to #SaveOurPappas, which Pappas Restaurants created and promoted on social media channels.
“This is a competitive bid process. It is not a popularity contest,” Mayor Sylvester Turner said during the council meeting. “This is not about ‘I like X, and therefore I want X.’”
The Mayor’s Office of Communications issued a statement earlier this month accusing Pappas of spreading disinformation about a “rigorous and meticulous competitive procurement process” that ended in Areas being awarded the new contract.
“Unfortunately, the inaccuracies are spreading quickly because Four Families has hired a lobbyist to run a smear campaign that questions the integrity of the process,” the statement said.
Pappas said in a statement on the petition website that it is disappointed in the decision, again alleging issues with the procurement process.
“Houstonians deserve a fair and transparent procurement process that supports local businesses,” Pappas’ statement said. “We did not get that from our leaders.”
The city used the same procurement process it has used to award several airport concessions in recent years, Turner said. But Council Member Mike Knox said the council hadn’t questioned the procurement process before because its flaws weren't brought to their attention, alleging that airport representatives participated in the grading process and wanted “fresh blood” at Hobby.
Areas prevailed in part due to its compensation agreement with the city. Areas said it would hand over 22.2% of profits, whereas Pappas offered 15.5%. That represents a projected $50M difference throughout the life span of the contract, Council Member Dave Martin said.
Council Member Robert Gallegos said he was reluctant to risk bringing new restaurants to the airport, as Hobby has become the only five-star airport in North America during its time hosting Pappas Restaurants.
The city used the same procurement process to award a 10-year contract earlier this year to LaTrelle’s Management, which works with Four Families to operate concessions inside Hobby Airport, according to the city statement. LaTrelle’s will bring Common Bond Bakery, Velvet Taco, The Rustic, Dish Society, Pinks Pizza and Fat Cat Creamery to Hobby Airport by November 2024, the statement says.
The council is obligated by law to follow the procurement process, Turner said.
“I would be vilified if I brought you the second-place choice,” he said.
The Areas contract passed by a vote of 11-6.
