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Mayor Sylvester Turner’s plan to amend lucrative Houston airport restaurant contracts has been blasted by one of the losers in this year’s concessions battle, Pappas Restaurants, and the winner in Saturday’s election to replace Turner, John Whitmire.
Next week, it finally could get a vote.
At-Large Councilmember Mike Knox used his “tag” Wednesday to delay consideration of the proposal for a week, potentially setting up a high-stakes vote during the final City Council meeting of Turner’s term on Dec. 20.
Turner and Houston airport chief Mario Diaz have asked the council to amend the city's contracts with four airport food and beverage vendors to require City Council approval for cancellation of the contracts for convenience.
Under termination-for-convenience language, the city may end a contract at any time if it believes it is in the city’s best interest.
According to the city’s top lawyer, changing that language would eliminate the risk that the city is put on the hook for the food vendors’ investment costs. Critics say the move reeks of favoritism for the winning restaurants in March’s “food fight” for the lucrative contracts.
“Obviously, that's to protect the status quo and the people that were the beneficiaries of who they know,” Whitmire said Wednesday. “Why are you doing it now? I'm very disappointed that they are loading the agenda with items that will tie the hands of future administrations, whether it's me or someone else.”
The Turner administration’s proposed contract amendments would change agreements with four vendors: SSP America and Paradies Lagardere at Bush Intercontinental and LaTrelle's Galley and Areas at Hobby Airport.
Currently, those vendors’ agreements with the city allow the Houston Airports System’s executive director to terminate them “at any time” by giving the companies 30 days’ notice.
That language matches boilerplate contract wording used by the city’s Strategic Procurement Department for most city contracts.
However, City Attorney Arturo Michel told the Houston Chronicle that terminations for convenience break with the city’s prior practice. Under former Mayor Annise Parker, the city’s contracts with airport food and beverage peddlers did not allow termination for convenience, Michel said.
The city would be on the hook for the food vendors’ investments if the airport director suddenly decided to cancel the contracts, Michel said.
In a statement Wednesday, a Turner spokesperson said the change was in the best interest of the city.
“Mayor Turner believes that having Council vote to terminate a contract approved by Council, where termination results in the city paying significant unamortized investment costs, is good government. The clause the city is amending does not exist in any other concession contracts at the airport,” Mary Benton said.
The statement did not explain why the termination language was included in the contracts in the first place.
The city is asking the council to amend the contracts so the vendors only can be given walking papers, for convenience or for cause, upon City Council approval.
In a signed cover sheet to council members, Diaz said the amendment would provide for greater “continuity” at the airports.
“Given the significant investments made by concessionaires and the importance of stable continued airport operations, it is recommended that greater oversight be exercised when a decision to terminate is contemplated, whether for convenience or for cause,” Diaz said.
Whitmire and other critics say the mayor is trying to bind the hands of his successor. During the campaign, Whitmire alleged that the airport vendor bidding was marred by irregularities and promised to overhaul the contracting process.
Pappas Restaurants sued the city in April after the council voted to hand the 10-year contract it had sought for Hobby concessions to Areas. Pappas lost a ruling that would have allowed it to stay in the airport, but the case remains pending.
In a handout to council members last week, the restaurant chain said the next mayoral administration should have a chance to weigh in on the contracts, that the changes ignored its pending litigation, that they would undermine the authority of the airport director and that they would be unfair to other airport vendors.
In a statement Wednesday, Pappas Restaurants CEO Chis Pappas rejected the city’s contention that it was unusual for airport contracts to allow termination for convenience.
“Due to our pending litigation, we continue to be concerned about the proposed changes to hand-picked concessions contracts,” Pappas said. “The Terminal E contracts that Pappas signed in 2019 have a termination for convenience clauses. Further, every airport concession throughout Texas that Pappas is involved in has a termination for convenience clause in favor of the landlord.”
Nancy Sims, a University of Houston political analyst, said she would be watching to see whether Turner places the amendment on the Dec. 20 council agenda.
If Turner does, council members could use various procedural maneuvers to try to avoid a debate and vote during his last meeting, or reject the measure outright, she said.
“I think the mayor-elect has made it clear he wants to review airport contracts. For the 10 returning members, they might not want to get off on the wrong foot with him at the very beginning,” Sims said.
In other council news Wednesday, the body approved a package of water billing reforms proposed by Turner.
The reforms include eliminating the annual cap on favorable water bill adjustments, incentives for homeowners to quickly fix leaks and a prohibition on sending out corrected, higher bills more than three months after the relevant month.
That measure was delayed last week when it was tagged by At-Large Councilmember Michael Kubosh. He said Wednesday he was satisfied with the reforms after having the opportunity to review them more closely.
Other council members praised the reforms, which are aimed at resolving one of the most nettlesome recurring issues for Houston residents during Turner’s last year in office.
“It takes effect now, immediately, and, hopefully, we will see a decrease in complaints to the city,” Turner said.
Note: This story has been updated to reflect that Pappas Restaurants lost a ruling in a lawsuit it filed against the city of Houston seeking to remain at the airport, but the case remains pending.
Staff writer Paul Cobler contributed to this report.
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