SEATTLE — A court hearing took an unexpected turn in a case involving a man who Seattle police arrested for a dangerous fire at a homeless camp earlier this week.

The man was booked in jail for reckless burning but on Thursday prosecutors were unable to file charges because they did not receive the necessary investigation documents from law enforcement — which instead went to the Seattle City Attorney’s Office. At that point, the judge ordered he should be set free from jail without conditions.

Investigators initially sent the case to the King County Prosecuting Attorney as a felony. Now it is being reviewed by the city attorney for possible misdemeanor charges.

He was released Thursday evening.

RELATED: Illegal Mercer Street encampment a 'priority' for cleanup following massive fire

The fire broke out Monday evening at an illegal encampment on Mercer Street near the on-ramp to I-5. Neighbors who live next to the encampment said the city has allowed it to exist for far too long.

“I would like it to be cleaned up. I would definitely say let's get it done faster,” said Hannah Hansen, who lives nearby.

RELATED: Mercer Street encampment fire started by fallen candle, man says it was an accident

According to court documents, the man police arrested for setting the fire told investigators he was cleaning his tent and knocked over a lit candle, then took off running when it burned out of control. KOMO News is not naming the man because he has yet to be charged.

The area is now badly scorched and many of the campers who rushed to escape the flames have since left the site. Some have set up tents on the other side of Mercer Street.

People have been living at the site for about a year, neighbors said, and in that time there has been a murder, assaults, rampant drug use and numerous other fires.

As for the man police initially arrested, he has an extensive criminal record that includes three felonies, 14 gross misdemeanors and nearly three dozen prior arrests. With all the ongoing problems at the site, neighbors said the encampment needs to be addressed.

“For sure, clean that area up but what becomes of that area? Is it going to be another homeless camp or is it just going to be a patch of greenery that we pass by,” said Jenna Pederson, who witnessed the fire and smoke on Monday.

Despite the judge ordering the suspect in this case to be released, a spokesperson for the city attorney's office said it is possible he could be on the misdemeanor court calendar on Friday. However, the spokesperson added that at this point, the city attorney has not yet decided whether criminal charges will be filed.

The mayor’s office also told KOMO News the homeless camp is on their priority list and city crews will be sent to clear it in the next two to three weeks.