We tore out the carpet, the flooring and gutted the bathroom, painting every exposed surface with oil-based primer. 

Reduce waste, re-use, refinish, re-surface. 

In general most basement water issues can be resolved by managing surface water on the outside.

But only grows on surfaces can stay airborne for years.

On the surface you are looking at a initial cost with repairs of approximately 55K.  

Any/ all soft surfaces like carpet etc need gone.

@Ben ClarkYeah it does sound fishy on the surface.

The house wreaked of cat urine... we literally had to use respirators to clear out the house... and even after stripping all the soft surfaces out after the owner left the house, it still smelled horrible...make that HORRIBLE!  

Usually a gravel or crushed concrete surface is good, depending on the substrate.

Alameda (city) has a requirement where total area of impervious surfaces cannot exceed 60% in the rear yard.