The building owners refused to fix code violations or pay property taxes before the April 2012 blaze, while the city failed to address neighborhood complaints that the huge eyesore was attracting vagrants, District Attorney Seth Williams said.
"Had city departments done their job, these deaths might never have occurred," prosecutors wrote in the grand jury report released Monday, which following a two-year investigation.
"While the building owners violated virtually every regulation that got in their way, they were never held accountable," they wrote. However, they added, "we do not believe that the available evidence can establish that their flagrant code violations and tax delinquencies caused the fire," which investigators believe was deliberately or accidentally set by trespassers.
The report also faulted fire department leaders for not enforcing a collapse zone to protect firefighters during the blaze. Fire officials have said the firefighters were trying to make sure that the blaze was out at an adjacent furniture store before a wall collapsed, killing Lt. Robert Neary, 60, and 25-year-old firefighter Daniel Sweeney. The report also notes a decrease in training due to fire department budget cuts.
"The grand jury report provides a detailed list of legislative and procedural recommendations to further improve safety, and the administration will carefully consider all of them," Deputy Mayor for Public Safety Everett Gillison said in a statement.
The Licenses and Inspections Department has begun working with fire officials to try to secure vacant buildings, the statement said. That department is already under review after a wall collapsed at a demolition site in December 2012, killing six people inside an adjacent thrift store.
New York-based developers Nahman Lichtenstein and his son, Michael, agreed to pay $730,000 for the former hosiery factory in 2008, with plans to redevelop the site in the up-and-coming Kensington neighborhood, the report said. They own dozens of other properties in New York and Philadelphia.
A call to a possible number for Nahman Lichtenstein in New York rang unanswered, while no number could be found for the son. A message left for a lawyer who previously represented them was not immediately returned.
A website touting Nahman Lichtenstein's properties states that "nothing brings him more satisfaction than rejuvenating an old, dilapidated building into a first-class dwelling."
That has not yet occurred in Kensington, where the building was at risk of going to sheriff's sale amid several citations and $73,000 in unpaid tax, water and sewage bills, the grand jury said. Residents have said they had tried to secure and clean up the site before the fire.
Williams said he shares the frustrations of the victims' families that no one could be charged, but he hopes the deaths will lead to reforms. "We can't just charge people because we have a bad taste in our mouths or we're angry," Williams said. "We are bound by the law."