They had declined any structural damages upon my inquiry and did not offer a credit to our offer as a sign of goodwill.

Hard as it is, assume good will and it might help you get a better, apologetic response. keep us posted

Give your contractor a small down payment as goodwill. 

If it was good tenant, I would probably do #3, that way they know they have consequences, but shows goodwill.1)  Pay for the whole thing,  and plan to increase rent next year to recover the cost2)  Offer to pay for it upfront, but bill the tenant  in payment options over the next 6 months3)  Offer to split it,  what's  a couple hundred compared to a good paying tenant?   

I do agree it would be a good lesson in real estate to take the courses and even the test but I guess like in Good Will Hunting you can get the education for a few dollars in late fees at the the library.

Being good will make you look great when compared to the others.

@Brad Hammond ok, I know I’m asking a strange question and perhaps the best course is just a referral and some good will.

That's what a lot of commenters here are missing.Part of what he's selling is his company's goodwill. 

Can the judge say that she is acting in "good will" can let her stay? 

Somehow, I allowed their future cat and bought new W/D for them when we signed the lease (I thought it's a goodwill effort, but I now know those are mistakes).