Small Project Design

We have been asked to help with an early 20th century brick building.   It is a small structure with 2 stories of residential above 1 floor of commercial store fronts. Over time it has become so out whack with modern codes that one wonders if it can or should be saved.  

With multiple sale of the property and land the building has come to have zero lot line clearances on all sides.   Of course there are windows and opening on all sides.  The stair leading from the street rises over 13 feet in a steep single flight to the second floor not in a rated enclosure.  There's a quasi second exit across a narrow wood exit balcony at the rear.   In short nothing works .  It is about to be surrounded on two sides with a new 5 story apartment building and it is in a historic district.

The Owner wants to dress it up and keep people renting.  Parts can be made safer but the lot lines aren't going to shift?   

What is the responsibilities of the various parties: the Fire Marshal, Building Official, Architect, Government responsibility toward such a structure.   How have any of you approached projects in buildings that might best be cleared.