More than 100 firefighters were called to the blaze, which took an hour and 20 minutes to bring under control.
Cause of the fire was under investigation, but Juan Delgado, 16, said he was walking by the factory shortly before 3 p.m. when a man carrying two gallon jugs called him over and asked for a cigarette.
Delgado said the liquid in the jugs looked like gasoline and he asked the man what he was going to do with it.
The man pointed to the casket factory, and said, "I'm going to light up that factory or the next one," according to Delgado.
Delgado said he left and returned later to see the factory in flames.
At the request of police detectives, Delgado searched the crowd watching the fire but couldn't find the man he had seen.
Neighbors said juveniles, drug users, prostitutes and others have broken into the abandoned building during the past years. The factory, which was
closed about two years ago, contained a great deal of wood and thieves often broke in to steal it, according to neighbors.
"I knew someday it would catch fire," said Judith Huertas, 27, who was forced from her home on Waterloo Street by the blaze. "They should tear it down."
Pedro Rodriguez, 33, said he and other neighbors often called the police about people trying to break into the factory.
"We feared something like this was going to happen," said Rodriguez. ''When we saw the fire," he said, "my wife said, 'I knew it, I knew