I suspect without money and active participation as LP, you cannot legally do what you suggest.Have you seen the underwriting?  

Has anyone had any luck obtaining legal counsel and fighting this?  

Said it great .Especially  A legal contractor has more to lose than a homeowner .

Sometimes when placing an offer --  the POS is not yet available - and when you place an offer you can make your offer contingent upon approval of these items... although in order to have a competitive offer in this seller's market you are basically forced to "assume" the pos violations once they become available (usually 2-3 weeks after it's been ordered) -- you should be able to tell if anything more serious might come up on the POS via your own personal inspection. 

Hire a company/person that is solely a QI like @Dave Foster they do it every day and will keep you legal and on track. 

I'm not sure if you're aware but STRs are not legal in JC unless you the owner live in the building 

Various legal setups can  mitigate a large part of this risk.  

That all is changing now, ever since Hilco Redevelopment Partners purchased the property in 2020, and received concept and development site plan approvals in 2022 and 2023.

One block may be legal, the next block may not be.

And never being “at risk” is it even sufficient to legally bind a seller?