Is it the repair is to fix the it and make it functioning, and replacement is to improve and add more value to it? 

Short a court order, the lender is absolutely correct.  

Their support app seems to function poorly or they may just be understaffed and can't respond or reimburse for other reasons.  1.

How can I design or propose these apartments to meet this requirement while making them functional for long-term residents?

When I hear of historical significance, I think of an old building with significant cap ex, and functional obsolescence.

Text messages can be a start, but if you ever go to court, I can tell you judges don't like text messages. 

Or alternatively go down to the local housing court, walk up to the counter and ask a clerk who a good real estate attorney is.

This was landlords burning their building because the city had obtained a court order REQUIRING landlords to continue to support and operate money losing apartment building.  

While you don't mention what state the property is in or the amount of the missed lien you or the title insurer might be able to either put up the cash or buy a surety bond and post it with the court.

I also converted the other side of the property (it's a functioning duplex) into an Airbnb / Short Term Rental.