Philby, when you say this:
Philby wrote:...when you add the cost of fixing the structural damage to the already higher cost of rehabbing an existing building compared to building new...
what is the source of your numbers, and what new construction are you comparing it to? Perhaps repairing significant structural damage and converting the building to apartments would be more expensive than tearing it down and replacing with a gas station. But that's comparing apples to oranges.
Certainly the developer proposing a convenience store to the neighborhood will make every effort to make people believe it is the only financially viable solution. They will do their best to overstate the structural damage to the building and the cost to repair it. If the current owner wants to sell to this particular developer, they may consciously neglect to secure and stabilize the building. I've seen much stranger things happen.
Higher density mixed-use development, which is more appropriate to the neighborhood, would likely cost much more per square foot than a convenience store. That's why many developers will first explore the latter. If the neighborhood and City push back hard enough, it's possible that the project will eventually evolve to include renovation of the existing building and/or more sensitive new development.
In order to properly evaluate the developer's claim of financial necessity, it is important to review (and question) the actual numbers and assumptions - not just take them at their word that it's the only viable solution. It may be the easiest and most profitable for the developer, but it's not necessarily the best option for the neighborhood and city as a whole.
There are many sources available to make up the funding gap on a more dense and contextually sensitive project, while also allowing for developer profit. An intelligent developer will explore these options if the easiest path (convenience store) doesn't fly. Or they will walk away and a better developer will step in and make it work.
My experience has been that in most instances, a strong case can be made that renovation is NOT in fact more costly than building new. It all depends on what is included in the comparison and who is making the comparison.
All generalizations are bad.