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One possibility is that the red comes out of one of the units and flipped some breaker in the unit adjacent to the heater. But then I have a black on one meter and a red on another! Is this possible?
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absolutely and that is exactly what it sounds like but, before you start checking all the unit panels, try manually turning off and back on (reset) each breaker in the common area panel and check for power at the heater. I have had breakers that tripped that did not look like they were tripped. If somebody grabbed the other leg from a breaker other than the 2 pole, you could still experience what you are.
so, is this a problem if one of the units is feeding the heater? absolutely. They are paying for 1/2 the power to run the heater plus, legally, you have to have the power from one panel.
how can you have this? the service to the building is the service to the building. It all comes from the same transformer and very likely comes in on the same service feeder and splits in house to the various meters.
essentially all you have is a bunch of panels fed with the same power. If you take one leg from one panel and the opposing leg from another panel, the power knows no difference.
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What else could be the problem? We did not smell anything nor we saw any melted wires at either end where the red is visible. Could the red wire have melted somewhere in between the panel and the heater? Can a half a second spark cause this?
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it wouldn't melt a wire this quick but if there was a bad joint somewhere in the circuit, it could have burned it to the point it won't carry any power anymore.
You might have to physically track the circtuit from one end to the other if this is the problem.