I found out why this glitch happens.
At the scene where kid tannen appears to get his shoes shined, you must speak with edna first and talk about the sober society and why meetings aren't held in the basement anymore. Then head over to kid tannen and talk to him regarding the sober society before taking the hat. If you didn't do that then the scene won't pop up as easily as it should (I.e after this event, go back to the soup kitchen and simply walk to the back and the cutscene triggers.)
Hopefully this helps those of you stuck at this pipe part too.