Council members voted 11-6 in favor of awarding a 10-year contract with a Miami-based company called Areas SAS.
The city's procurement office scored the Areas bid higher than the one from Pappas, but only by a tiny margin. Still, Mayor Sylvester Turner said they won, and he had no choice but to recommend Areas over Pappas.
"I would be vilified if I brought you the second place choice," Turner said before Wednesday's vote.
Mayor Turner and those who voted in favor of awarding the contract with the new company said it ultimately came down to added revenue to the city.
Areas offered a higher percentage of sales to the city at 22.2% compared to Pappas, which offered 15.2%.
"The difference on the revenue side in 10 years is over $20 million to the city," Turner said.
Council Member Dave Martin echoed the same sentiments. He said he loves Pappas but can't look beyond the revenue.
"I'll ask you and the citizens of Houston: do you want me to vote for the number two firm, which is $50 million in revenue less than the winning firm? If you do, I don't know what to say," Martin said, as he looked into an ABC13 camera.
Pappas owner, Chris Pappas, sat in on the meeting, visibly upset after the vote, realizing it was an end of an era at the airport.
"(I have) disappointment with it," Pappas said. "We have been in this process for over three and a half years."
Pappas said there is no guarantee that Areas will even be able to generate the revenue they predicted.
"They are estimating how much they are going to deliver," Pappas said. "They don't have any restaurants here. We have restaurants in the airport that we did our estimations off. We had harder facts."
Pappas also expressed concerns about the procurement process.
"The panels currently selected are all airport employees, and there is only five of them," Pappas said. "That's a pretty small group"
Airport employees will be relocated to their other locations outside the airport and will keep their salaries and positions, according to Pappas.
The restaurant created a petition to save Pappas and received more than 50,000 signatures.
A sign now says "Thank You Houston" outside one of the Pappas-owned restaurants at Hobby.
"I want to thank the public that got out there and rallied for us," Pappas said. "It wasn't quite enough to turn things around, but I think a lot of people on this council were aware of all the happiness that y'all have had with your food and service over the years. So thank you for all participating in the petition."
In a press release, Hobby Airport said Areas operates more than 130 restaurants inside 10 major airports in the U.S. The new 10-year agreement is set to include Killen's Barbeque, The Spot, SpindleTap Brewery, Starbucks, and Yard House, and is projected to generate as much as $104 million in revenue.
The transition is planned to begin later this year, with all businesses opening by November 2024.