It sounds good, but what happens when the reservations dry up and they're not making enough money?

A neighbor recently pulled off a similar project, so I believe the town will allow it (fingers crossed).

At any rate for "evidence" she had pulled up (and thrown away) a small piece of carpet claiming once she did that she found "mold" and "dried blood" under it. 

Fingers crossed that is the case. 

After it dried the stench was worse and the stains ,and rips, and tears are fully visible.

If your contract was indeed contingent upon financing, and you can no longer obtain financing, then this seems pretty cut and dry. 

I guess I'd shop vac and then spray it down with a product designed to kill mold, then cross your fingers and see what happens....Note: If you test it for mold and it comes back positive, you're opening a whole other can of worms.....

My fingers are crossed this ends in the next few months.

And it's not cut and dry either - there are also C/D areas outside those neighborhoods, there are areas bordering those neighborhoods that are much better, there are no magic lines you can point to as the boundaries, etc.Also, very often MLS listings omit anything that makes the property sound less appealing (so they'll say "Elmwood" instead of "South Providence", or "near East Side" instead of "below Camp St").

The site was once an auto repair shop, across the street was once a dry cleaners, and next door was once a gas station.