IsaacsI have an “alterations and improvements clause in my leases.

Assuming they can’t pierce the corporate veil in proving the LLC is in fact an alter ego of yourself .

All the contract is just negotiation and should be altered for each job. 

Your tenant was friendly, but now they are looking at a major life altering event and potentially a multi-million dollar claim against you. 

Any tips or suggested alterations to the plan?

You need to review each lease to make sure they either conform to and work with your development plan, see if you can amend leases that don't work with your plan, or alter your plan to work with the current leases.I see an opportunity to create value in either event (that is under the current zoning/density or increasing density).

Also, in my layman's opinion this makes your LLC look like an alter-ego, just as bad as co-mingling to pierce your corporate veil. 

The existing paint was still in good condition, prior to the alterations.

Structural engineers have a wide range of expertise in different material types that would require me to entirely pivot my career field.Currently my thought is to limit my service to providing stamped drawings for permitting of minor alterations of existing wood frame structure such as windows, doors, and load bearing walls.

There are issues to me about using the LLC as your alter-ego and also co-mingling funds since the mortgage is in your name, and not the LLC --- where do you draft the funds to pay the mortgage, and what / who is claiming the deduction (albeit, the IRS may consider the entity disregarded for tax purposes, but the corporate veil is a legal issue)?