No Public Funds To Rebuild Worcester Building Where 4 Died: Vote

WORCESTER, MA — The Worcester Affordable Housing Trust Fund voted not to consider granting public money to rebuild a Gage Street property where four people died in a fire last year after an emotional and complicated meeting Wednesday.

A new owner with familial ties to the former owners of 2 Gage St. — which burned in May 2022, killing four residents — came to the board seeking about $472,000 to help build a new apartment building on the site. The project would've included three affordable units and four market-rate units.

Developers can ask the Affordable Housing Trust Fund for public money to help construct new affordable housing units. The fund is relatively new, created in 2021 with federal stimulus money.
Wednesday's meeting began with comments from several former 2 Gage St. residents, including one woman who escaped from the burning building. The residents were opposed to the plan to rebuild, afraid that the former owners would be in charge of a new building.

Former residents have said the former owners of 2 Gage St. didn't take care of the property, leading to problems like mold, vermin, and scores of visits by the police and fire departments. The building was also not insured.

"I think the accounts that have been given since the fire and even before that, I don't think that should be disregarded just because they're looking at a new space," former resident Kitty Bousquet told the trust fund board.

The entire Worcester City Council sent a letter to the trust fund board opposing the application. The letter was signed by District 2 Councilor Candy Mero-Carlson and Mayor Joseph Petty.

"To even consider giving funding to this applicant is disgraceful," the letter said.

Related: Many Code Violations Preceded Deadly Gage Street Blaze

Jaime Vargas, a Marlborough contractor, spoke to the trust fund as the applicant Wednesday, saying that he would be entirely in charge of the project. He said the new building would be overseen by a property management company once built.

The ties between Vargas and the former owners became clearer under questioning by the board. The property has been subject to a series of swaps between former owners Huanchen Li and Wendy Wang, an LLC, and Vargas since June 2022.

According to the Worcester Registry of Deeds, Huanchen Li, Wendy Wang, and 2 Gage Street LLC transferred the property in February to a new company, 2 Gage Worcester LLC, for less than $100. Vargas told the trust fund he controls 50 percent of 2 Gage Worcester LLC and a family member of the former owners controls the other half.

Vargas told the board he paid $300,000 for the property. When asked why the deed said he only paid about $100, he said he paid $150,000 property. Vargas could not explain why the deed did not state that amount.

Daryl Abbas, an attorney representing the previous owners, told the trust fund that Lisa Li, who is either Huanchen Li and Wendy Wang's niece or daughter, is the 50 percent owner of the new company — 2 Gage Worcester LLC — that would redevelop the site with Vargas. She was not at the meeting on Wednesday.

According to Secretary of the Commonwealth records, Lisa Li took over as manager of 2 Gage Street LLC in March. The transfer of ownership was signed by Huanchen Li.

"Lisa Li takes charge. Others retire," the document says.

Huanchen Li is also listed in the application for the affordable housing funds, but only because he remains the resident agent of 2 Gage Street LLC. In Massachusetts, resident agents act as local representatives for LLCs, but don't necessarily make business decisions.

The 2 Gage Street LLC managed by Lisa Li would also provide a large share of the estimated $1.5 million project cost, according to Vargas' presentation. 2 Gage Street LLC would give almost $400,000 as a loan to 2 Gage Worcester LLC, and the latter LLC would provide $95,000 for the project. Vargas would also seek a hard money loan of about $625,000. The $472,000 from the trust fund would've rounded out the project funding.

The board could've voted either to allow the 2 Gage St. application to move to the next step in the process to receive money from the trust fund or to stop the project from moving forward completely. The board voted unanimously for the latter.