When Philly’s water mains break, city offers little support for victimized businesses

Philadelphia’s water pipes typically breach more than 800 times a year, and every once in a while, the event is catastrophic, causing flooding, closed streets, and months of repairs.

That was the case at Third and Arch Streets in Old City on Jan. 7, when an eight-inch cast-iron pipe laid in the ground in 1824 ruptured, forcing an excavation that has grown wider and deeper as workers explore the extent of the damage. Since then, nearby businesses — as many as 100, by city estimates — have coped with fewer customers, dwindling revenue, and the prospect of the intersection remaining closed to traffic for an additional two months.

“My business is down 60%, at least,” said Aris Katourtsidis, whose family has owned Old City Pizza at the corner for 33 years. “I depend on walk-ins.”

A pipe almost two centuries old is a rarity in the city, according to John DiGiulio, a spokesperson for the Philadelphia Water Department. Less than 1% of the 3,000 miles of water mains date to before 1850, he said; the average age of the pipes, typically made of iron, is 75 years.

Damaging breaches aren’t uncommon. In 2018, it happened at Sansom and Juniper Streets, where a hole opened up that took almost a year to repair.

Little more than seven years have passed since Old City contended with a transmission main break that flooded the streets with five million to six million gallons of water and took three months to repair. With the frequency of these failures, area businesses are asking why the city can’t do more to help them when such random and disruptive events occur.

» READ MORE: 2 months of repairs needed for Old City water-main break

Old City has a unique blend of restaurants and locally owned shops, but as more neighborhoods have prospered, competition has become fiercer, said Job Itzkowitz, executive director of the Old City District.

“Now we’re competing with Fishtown and Passyunk and West Philly,” he said.

Throughout the city, even thriving small businesses can stand on a razor’s edge between success and a fiscal cliff, said Paul Levy, president of the Center City District. A few months of disruption can be devastating.

“Most of these businesses are not operating on huge profit margins,” he said. “They’re operating on volume, they’re operating on seasonal trends.”

Amber Ashley Parker, 31, who lives on Arch Street, criticized the city at a recent informational meeting with representatives from the Water, Streets, and Commerce Departments for businesspeople, property owners, and residents at the Independence Mall Visitors Center. The city, she said, should have more data on how a major water-main break affects a community. The consequences of an infrastructure failure can include lack of parking due to repair work, the instability of the street, and the elimination of foot and car traffic.

At Third and Arch, boards cover the 5-by-12-foot-wide chasm in the street. A redoubt of orange barricades surrounds the excavation, and save for the occasional driver who makes it halfway up Arch, only to abruptly reverse course, the nearby streets are largely bereft of people.

“We are not prepared,” said Parker, who works as a compliance officer at Children’s Hospital of Philadelphia and runs a consulting business. “There’s no excuse for that.”

She asked a Commerce Department representative why the city hadn’t performed a needs assessment after the 2012 incident to determine the impact on businesses and residents’ safety, income, and expenses. The official acknowledged that the financial impact was unknown.

Further, when infrastructure disasters strike, the city has little aid to offer. The Old City District has received a $50,000 city grant to pay for cleaning and marketing, as well as signs letting people know the businesses near the water-main break remain open, a message Itzkowitz said would be pushed with radio ad campaigns.

It’s not nearly enough, business and property owners replied.

“What I’m looking for is some city participation in this to make a grant program or a loan program available,” said Rick Snyderman, an Old City resident and retired operator of one of the first of the art galleries that have become a neighborhood staple.

In the next two weeks, the Water Department will replace a 20-foot section of pipe. Peco will need to work on its ducts under the street, and Verizon might as well, officials said. During the estimated eight weeks of construction, Third Street will be closed from Market to Race Streets, and Arch Street from Second to Fourth.

Rene Galvin, who has run the clothing boutique Never Too Spoiled on Third Street for six years, has diversified her retail business by holding such events as baby and bridal showers at her store. Her retail business holds up well against online shopping, she said, but the events have become a necessary alternate source of income. Now, she won’t be able to host them because of the street closures, she said.

“So in February and March, I won’t do a booking,” she said. “They expect to be able to drop off gifts.”

She filed a claim with her insurance company for her lost business but was rejected because access to her store wasn’t completely blocked. The city’s own distressed business tax credit allows reduced payments based on projections for annual earnings, but that’s available only if a public works project makes the entrance inaccessible.

Galvin thinks she’ll be able to persevere, she said, but will have to find other ways to make up the lost revenue.

“I’m going to push the internet and I’m going to push everything I can to try to not give up the ship,” she said, adding that more immediate relief from the city would be welcome.

Dawn Summerville, a Commerce Department director, said at the community meeting that the possibility of a tax break for affected businesses was being explored. But the city’s Revenue Department downplayed that as a solution, saying businesses needed more immediate relief. Mark Squilla, the city councilmember who represents Old City, also expressed doubts at the meeting that a tax break could be an effective remedy; calculating an appropriate tax remittance, he said, would be difficult.

Squilla did, however, back the idea of an emergency fund, for which the city would set aside money in the general fund.

“If there was a fund that businesses could apply to," he said, "I think we’d have support.”

That would present its own challenges, said Kevin Lessard, a city spokesperson. It would require correctly estimating the need in a given year, and setting standards for what circumstances would qualify a business for assistance, and how much would be appropriate.

Levy noted that the age of the city’s infrastructure made another failure like last month’s virtually inevitable, and that the city should find some way to soften the blow for businesses.

“This is obviously a very old city with very old infrastructure, and we’ve been going through a fairly sustained boom,” Levy said. “Ought there be a contingency fund of some sort, and do the utilities need to be part of that?”