Feds charge hookah bar owners with setting Old City fire that displaced hundreds, shuttered popular eateries

By last year, the business that brothers Imad and Bahaa Dawara operated in Old City’s busy Chestnut Street tourist corridor was floundering.

The city had shut down their initial concept, Barra Restaurant with an attached hookah lounge known as B-Sides, over noise complaints from neighbors and for operating without the proper licenses. A rebranding in 2017 as the 24-hour Revolution Diner — an attempt to capitalize on their proximity to the newly opened Museum of the American Revolution — did little to stop the financial bleeding.

And their relationship with their landlord, to whom they owed $64,000 in back rent, had long been contentious, prompting Imad Dawara to once allegedly threaten to destroy the whole building.

Authorities now say that on Feb. 18, 2018, he did.

In an indictment unsealed Thursday, federal prosecutors charged Imad Dawara, 39, of Swarthmore, and Bahaa Dawara, 31, of Woodlyn, Delaware County, with intentionally setting a four-alarm conflagration that destroyed their 239 Chestnut St. building and quickly spread, displacing hundreds of neighboring residents, devastating several popular Old City eateries, and causing more than $20 million in damage.

Investigators allege they took out a $750,000 insurance policy just weeks before the fire and tried to collect while their neighbors grappled to pick up the pieces.

“Nobody in Old City will forget the day that this massive arson lit up the sky,” U.S. Attorney William M. McSwain said at a news conference to announce the charges at his office, just blocks from where the fire began. “This impacted the heart of our nation’s most historic square mile.”

No lives were lost in the fire, which broke out on a busy Presidents Day weekend and took firefighters more than nine hours to control and months more to fully investigate. But the damage is still being felt.

Popular establishments like the bar and restaurant Little Lion and a Best Western hotel remain closed nearly two years later. And the owners of the Capogiro gelato chain blamed their decision to shut down their entire business last year on the financial losses they sustained at the Neapolitan pizzeria Capofitto they ran on the block.

The building itself, a 166-year-old structure with a first-floor cast-iron façade, was razed almost completely, displacing dozens of apartment dwellers who lived on its upper floors.

Many of those residents said they suspected the Dawaras, whom they described as problem tenants, from the get-go. But in the hours after the fire, Imad Dawara claimed to be a victim just like everyone else.

“I had my blood there,” he told The Inquirer a day after the fire. “I’m so upset about what happened.”

His brother posted news stories about the blaze on his Facebook page with three sad-face emojis.

And when their employees at another nightspot they run, B-Side Complex at 939 Delaware Ave., sued them last year for unpaid wages, the Dawaras cited the fire in their defense, saying it had destroyed all of their files, according to court records.

In truth, prosecutors said Thursday, Imad Dawara was at B-Sides in the early morning hours of Feb. 18, after sending his brother to Chestnut Street to douse their other building’s basement with gas to set it aflame.

Agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives began to suspect the brothers after learning of the insurance they took out shortly before the blaze, even though Revolution Diner had not been open for weeks.

According to the indictment, the broker who sold them the policy recalled Imad Dawara repeatedly asking during their conversation exactly how he would be paid if there were a fire.

Neither brother was available for comment Thursday. They have remained in custody since agents arrested them a day before at Philadelphia International Airport, where Imad Dawara was picking up his brother from a return flight from Syria.

Their lawyers, Todd Henry and Robert Gamburg, said the Dawaras intended to plead not guilty, but declined further comment, saying they had not had a chance to read the indictment.

The brothers are each charged with 10 counts including conspiracy to commit arson and to use fire to commit a federal felony. They face a mandatory minimum sentence of 17 years if they are convicted.

But news of their arrest came as cold comfort to still-struggling residents and business owners on their block.

“I’m just glad they’re indicted, and I hope they get convicted,” said their former landlord, David Ciurlino.

Meanwhile, Chris Younge, owner of Little Lion, spent the day the same way he has for months, working in the gutted shell of the bar he once ran, continuing the costly rehab work that he hopes will allow him one day to reopen.

“Nobody’s unhappy that they’re going to be held accountable for what they did,” he said. “But the financial impact is the killer.

“The entire block is still just a ghost town. It’s dead now.”

Staff writers Michael Klein and William Bender contributed to this article.