After a fight from Pappas, Houston managers to take up Hobby’s contract

After a fight from Pappas, Houston managers to take up Hobby’s contract
After a fight from Pappas, Houston managers to take up Hobby’s contract

The Houston City Council will finally decide Wednesday who will manage the food and beverage spaces at Hobby Airport, following a three-week campaign by Pappas Restaurants aimed at changing the outcome to keep the eateries there.

The expected vote follows two weeks of delays by the council amid questions Pappas officials have raised about the yearlong contracting process, which they claim was flawed.

The city has proposed awarding the 10-year, $470 million deal to Areas SAU, a Spanish company that partnered with several local groups. An affirmative vote would culminate nearly four years and three separate rounds of bidding for the deal, an unusually lengthy contracting process.

TURNER’S TAPE: Turner has deep ties to people on $470 million Hobby Airport deal, but also has friends on Papa’s side

Pappas officials have questioned that timeline and the many times the city has scrapped the acquisition because of good scores. Gruppen Pappas led the stands to lose the final bidding round by a score of 85.6 to 85.2.

Mayor Sylvester Turner’s administration has defended that competitive process, accusing Pappas of running a “smear campaign.” He and others have argued that Areas won because it brought a significantly higher share of revenue to the city. Areas has offered 22 percent of sales to the Houston Airport System, while the Pappas-led group offered 15.5 percent.

The result would remove the variety of Pappas brands currently at Hobby Airport. Instead, Areas has proposed a group that includes The Spot, Killen’s BBQ, SpindleTap Brewery, Starbucks, Longhorn Steakhouse, Yard House, Pei Wei Asian Kitchen, Throughgood and Clutch City Coffee.

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The difference in compensation was enough to give Areas a razor-thin victory over Pappas in the final bidding round. Pappas prevailed when compensation to the city was not included with an average score of 78.2 to 75.8, or 2.4 points. However, Areas scored 9.8 points for its proposed compensation, giving the company a lead of four tenths of a point.

The city has not released rankings from the previous bid rounds that were scrapped, including one that was tossed last year “due to relatively similar scores.” Airport and procurement staff gave presentations to councilors on these rounds, but did not hand out scorecards, and councilors were not allowed to take photos of the presentation.

At-Large Councilmember Michael Kubosh said Tuesday that Areas had not finished in the top two in any previous round before the latest acquisition. Turner previously said Pappas had never finished first.

KEY MATTERS: Breaking down the key issues in the Pappas-City Hall debate

Airport concession agreements are among the most lucrative and competitive contracts available at City Hall, often inspiring so-called “food fights” when they come up for approval. Turner has overseen much quieter approvals for a set of Bush Intercontinental Airport contracts last year, and half of the Hobby deal.

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