Pappas Restaurants sues City of Houston over failed Hobby Airport bid

HOUSTON, Texas (KTRK) -- In the latest round of an ongoing food fight, Pappas Restaurants is suing the City of Houston over the company's failed attempt to stay at William P. Hobby Airport.

In the lawsuit filed Tuesday, Pappas Restaurants alleged that the city:

• Failed to comply with the statutory procedures for competitive sealed proposals

• Failed to consider the criteria to determine best value for the city, as required by state and municipal laws

• Failed to conduct the solicitation in accordance with globally accepted public procurement standards, made applicable to the captioned procurement through municipal laws, including transparency, impartiality and accountability

• Failed to conduct the solicitation in accordance with the city's administrative policy for requests for proposals

• Failed to follow the Open Meetings Act requirements

• Violated globally accepted public procurements standards, fraud, lack of procurement integrity and responsibility and under general principals of fairness

In early March, City Council voted 11-6 in favor of awarding a 10-year airport concessions contract to a Miami-based company called Areas SAS.

Areas offered a higher percentage of sales to the city at 22.2% compared to Pappas, which offered 15.2%.

Council Member Dave Martin said he loves Pappas but can't look beyond the revenue.

Pappas argued officials violated city and state law when they gave the concession contract to Areas.

SEE RELATED STORY: Houston City Council votes against renewing Pappas restaurants' contract at Hobby Airport

According to Pappas, the basis of the lawsuit is that William-Paul Thomas, Mayor Sylvester Turner's former top aide, reached out to Pappas in 2019 during the first round of the bidding process.

But that would be a violation of city policy because it was during the "no contact period."

Thomas abruptly left his position in August 2022 after he pleaded guilty to federal public corruption charges, ABC13's partner, the Houston Chronicle, reported.

Citing a source with direct knowledge of the situation, the Chronicle reported last summer that Thomas admitted to conspiracy to accept a cash bribe in exchange for changing a bar's classification to a restaurant, allowing the bar to stay open longer during COVID restrictions.

Thomas pleaded guilty on July 25 and submitted his resignation the next day.

The Pappas' lawsuit claims Thomas may have had access to confidential information about proposals.

His attorney did not respond to requests for comment from our partners at the Houston Chronicle.

ABC13 reached out to the mayor's office, who said in response, "The city has not seen the lawsuit and has no comment. As previously noted, the city followed its normal procurement policies throughout the process.

This latest move comes after Pappas filed a protest, asking the city of Houston to set aside the new contract and re-evaluate the bidding process, the Chronicle said.

Pappas had the Hobby contract for 20 years, but the transition is planned for later this year.

In a press release, Hobby said Areas operates more than 130 restaurants inside 10 major airports in the U.S.

The new 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.