Play for resolution. 

Do I need to approach the local City for any info that may help or does the resolution revolve around negotiations with private parties, such as the neighbor?

Normally the foreclosing bank will not accept anything so far below the mortgage, but when this happened, the foreclosing bank was a failing bank under control of the RTC (Resolution Trust Corporation) at the time, so the bank doesn't care either. 

And sounds like this is moving toward a contentious resolution. 

My New Year's Resolution was to do at least one deal by next year.

I am not done with them and will work to seek resolution to the $17,000 in work that they walked from. my goal is to have the last unit completed in 60 days.

We have a list of documents such as entity information, org charts, resolutions, financial statements, tax returns, etc.

It also needs to be something short term or have a resolution in view.

Even though it will mean a hailstorm of calls, texts, and emails I think using an insurance matchmaker portal that pushes your application out to a dozen or more companies with a unified application might be the best route to find a company that is willing to insure at a lower rate.If it comes to selling it, the best news is that the renovation of the bottom unit will probably lead to a higher sales price, but I know that is icing on the wrong cake.I'm hopeful that the resolution of this works out even better in your favor that you can imagine!

If their dogs get attacked (whether it be by a neighbouring pitbull or a hawk or a car through the house) it is not your responsibility to find a resolution.