Gage Street Fire One Year Later: Worcester Denies Funding for New Build

By Kimberly Rau, MassLandlords, Inc.

A year after a blaze killed four residents at 2 Gage St. in Worcester, former residents recently implored the board for the Worcester Affordable Housing Trust Fund to deny public funding that property owners sought for a new building.

2 Gage St., Worcester, as of June 2023. The apartment where four people died after a fire has been torn down, but grant money for the new construction project was unanimously denied. (Image License: Google Earth https://tinyurl.com/2GageSt)

The cause of the May 14, 2022, fire was determined to be arson. Former tenant Yvonne Ngoiri was indicted in September 2022 on four counts of second-degree murder, along with arson and assault charges. She pled not guilty and was held without bail. The triple-decker sustained significant damage and was torn down. The fire spurred Worcester to propose both an inspection ordinance and legislation that would create a rental property registry.

The two proposed ordinances went before the city council in June 2022. On Sept. 29, 2022, they were ordained and added to Chapter 9 of the Revised Ordinances of 2008.

Long before the fire, the Gage Street property had been on the city’s radar. According to public records, Worcester code enforcement officers had visited 2 Gage St. at least a dozen times between 2013 and 2021. The owners, Huanchen Li and Wendy Wang, who are not MassLandlords members, own four properties in the city. Under their ownership, those properties have a less than stellar record: As of 2022, they had racked up a cumulative and impressive 574 code violations, including 88 fire violations.

Affordable Housing Trust Fund Can Assist with New Construction; Rehabilitation

This June, the owners of 2 Gage St. approached the board of Worcester’s Affordable Housing Trust Fund (AHTF) to ask for nearly half a million dollars to construct a seven-unit building. Three of the units would be income-restricted to those earning 30% or less of the area’s median income (AMI).

The trust fund was established in 2021 from a $15 million grant that was part of a larger award from the American Rescue Plan Act.

“The goal for the distribution of AHTF funds is to promote and finance the development of affordable rental and first-time homeownership housing consistent with the City of Worcester's Affordable Housing Trust Fund and Analysis of Impediments to Fair Housing,” the website for the trust fund reads.

Eligible projects that could qualify for funding through the AHTF include new construction that would add affordable housing units, as well as “substantial rehabilitation” of existing properties that will add affordable housing units. If you are a Worcester landlord, or looking to become one, check and see if the trust fund is something you may be able to access for your housing projects. There’s still time to apply; all projects must be started by Dec. 31, 2024, and completed with occupancy by Sept. 30, 2026.

Board Raises Questions as Owners Request Funds for Rebuild Amid Strong Objection

While new construction at 2 Gage St., as outlined, would technically be eligible for AHTF money, several former tenants attended the meeting and requested the board not grant the owners funding.

Attending former residents of 2 Gage St. alleged that owners Li and Wang allowed the property to fall into severe disrepair. A letter read at the meeting called the owners negligent and asked the board not to “reward” them with money to construct a new building.

The Gage Street property is purportedly now owned by Jamie Vargas, who claimed the property was no longer connected with Li. When questioned by the board, Vargas eventually revealed that he and a relative of Li’s had jointly purchased the property for $300,000.

However, the registry of deeds shows that 2 Gage Street LLC (owned by Li and Wang) sold the property to 2 Gage Worcester LLC for under $100, with no mention of a $300,000 purchase price anywhere to be seen. Vargas is listed as a manager for 2 Gage Worcester LLC, but 2 Gage Street LLC is also listed as a manager, proving a connection to the owners who were in charge when the building went up in flames. Li is listed as the resident agent for both LLCs.

It’s hard to cover your tracks when it’s easy to look up who’s connected to an LLC.

Board Turns Down Funding Request

After hearing strong testimony against the owners of 2 Gage St., the board unanimously voted to deny any funding for the new construction project.

Daryl Abbas, an attorney representing the LLC, said that the project will go forward with or without AHTF money. The question was whether any of the units would be affordable, which hinged on getting the requested funds.

The application filed with the AHTF noted that construction has already started on the new edifice, and should be completed within the next year and a half. The projected cost is $1.6 million. It will have seven apartments, with a total of 22 bedrooms. Representatives for the property noted that, regardless of funding sources, one of those units will be accessible under the Americans with Disabilities Act.

Conclusion

There are a few takeaways from this story.

First and foremost: don’t be a slumlord. Four people died and others were injured in a house that was not in good repair before someone came along and set fire to it. (Though the person charged with setting the fire is innocent until proven guilty, fire officials have stated the cause of the fire was arson.) One of the reasons the owners of this property did not receive funding was because former residents took the time to beg board officials not to make it easier for them to create more housing and subject others to their level of property management.

Second, there is money available for some housing projects that you might not be aware of, as they don’t always receive much publicity. Does your city have an Affordable Housing Trust Fund? Check and see what your municipality offers. You may be surprised. While you’re at it, see what programs like Mass Save can do for your properties as you make them more environmentally friendly.

Third, it’s hard to be shady when we have a wealth of information right at our fingertips. It’s hard to cover your tracks about who owns what when it’s incredibly easy to look up who’s connected to an LLC. If you haven’t been managing your properties the way you should, don’t try to cover your tracks and pretend nothing happened. Instead (shameless plug ahead), become a Certified Massachusetts Landlord™ and get on board with the best practices that will have your renters singing your praises, not going out of their way to keep you from creating more housing. You win, your tenants win, and you might have an easier time making inroads in your city.