A Harris County judge has denied Pappas Restaurants request for a temporary restraining order that would block its removal from Hobby Airport. The restaurant and the City of Houston have been in an ongoing battle ever since the restaurant lost its concessions contract in March.
Pappas restaurants filed a lawsuit this week against the City of Houston, alleging its bid process was flawed. The City of Houston awarded a 10-year, $470 million concessions contract to Areas, a company headquartered in Spain and Pappas has been fighting to regain its spot.
Pappas is due to move out of Hobby on May 11th. The restraining order would have paused the restaurant's move out day for 14 days.
Arturo Michele is the city's attorney and said previous contracts have moved through the bid process with no concerns.
"We've had a couple of recent ones that have gone through, it is the exact same process," he said. "We think this is very defensible and we will prove that to the court."
Pappas’ lawsuit alleges that the city's scoring process was unfair and Areas did not score high until the final rounds of bidding. Also in the lawsuit, the company said the city's former liaison to city council, William Paul-Thomas, called Pappas in November 2019, violating the city's rule that prohibits any discussion to prospective vendors during the bidding process.
Mayor Turner stated that Areas scored higher during the bidding process, projecting a 22.2% of revenue from concessions sales; Pappas offered 15.5%. Areas also offered a $20 million difference in profit over the next 10 years compared to Pappas' offer.
"We are confident that we will ultimately prevail," said City Attorney Aturo Michele. "WE think the process was clean, it was fair, and it provides the best value to the citizens of Houston."
The judge in the case did order the City and Pappas to go through mediation before a temporary injunction hearing set for April 26th.
"We think it was a unique solution on the part of the judge to order the parties to mediation," said Chris Pappas, CEO of Pappas Restaurant. "We look forward to meeting with the City of Houston and Areas to see if a resolution can be reached."
