HOUSTON – Houston Mayor Sylvester Turner and 10 other council members voted “yes” in favor of awarding the contract, with six voting “no.”
Areas, a Miami-based company, defeated Pappas by a razor-thin margin in the original presentations, but the formal approval process has come under fire right up until the moment council members made the final vote.
“Last week, I had a conversation with Mario Diaz, Director of the Airports System, and I was asking him about this, and essentially what he told me was that the Four Families have been there for nearly 20 and we need some new blood (in) here. Now, not being in a vacuum, I have to be concerned at this point that there was a predetermined outcome,” said Mike Knox, councilmember at-large for Position 1.
Since Areas was revealed as the winning proposal, there have been multiple questions about their proposal by officials.
“Areas didn’t send their local participants to an oral presentation. Why?” asked Mike Kubosh, councilmember at-large for Position 3.
The longtime council member did not hesitate in providing his reasoning to the media while outside council chambers.
“Because they knew they had already won. Anytime the Mayor wants something in the city of Houston, he can get it done because he has that influence over councilmembers,” said Kubosh.
The five-member review panel that originally graded the proposals had two representatives from the Houston Airports System, one from the Health Department, another from Administration and Regulatory Affairs as well as the mayor’s office. The ladder is a concern that Chris Pappas, a founder of Pappas, pointed to after Wednesday’s vote.
“One of the things in any procurement where you are having a panel, you want to avoid undue influence,” said Chris.
Pappas had been at Hobby for 20 years. One of their arguments is that they were a proven Houston brand that delivered $25 million more than expected at Hobby. The hometown connection generated questions about the Hire Houston First Ordinance, which was listed in the original RCA, but an 11th-hour letter sent by city attorney Arturo Michel informed councilmembers the reference to Hire Houston First was incorrect.
The misprint comes after other claims, like famed Houston Chef Chris Shepherd being listed as a “Culinary Consultant” for Areas. Shephard gave KPRC 2 Investigates a lengthy statement clearly detailing that he was not a part of Areas’ team and that claims of his role as a “Culinary Consultant” was not true.
Yet, Areas was graded for this false claim and the city viewed it as a strength in their presentation, according to an executive summary.
At the end of the day, and with all the revelations that came to light, Pappas lost the lucrative airport contract by six-tenths of a point over financials. Areas promised a greater return than Pappas, even though Pappas officials and other concessionaires KPRC 2 Investigates spoke with said the projected revenues were “not possible” to achieve.
Chris Pappas said he also had questions over being penalized in three Texas airports, yet he says his restaurants report the highest volumes in sales in those airports.
For Houston Mayor Sylvester Turner, this vote was about a process that he says did its job.
“The process is there to protect this administration and the process is in place to protect you as well, whether you like it or not,” said Turner.
It is unclear when Pappas is moving out and Areas is moving in, but Pappas says all their employees will be provided with equal opportunities at their street locations.
How did your councilmember vote? We broke it down in the graphic below.
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