Blackrat, I think I would look at the tax advantages of getting the house off the tax roles. What is the current property tax value of the house? If you talk to a CPA and have documentation of renovation costs you've spent, you might be able to declare a loss on income tax as well. Those things and free removal seem to favor asking the contractor what he would consider a fair price. I wouldn't just offer it for free, but if he says he will remove the structure and pay you a small amount or do it for free, I'd be inclined to accept his offer. I'd be mostly interested in when he would start, how long he will take, and what will happen if he gets half-way through the job and changes his mind. You have the chance of having all your work and expense half destroyed and then he walks away. I think I'd want a bond posted with full refund on completion. If he doesn't finish the job, then he forfeits the bond to you. You want to be better off when this over; either the house gone or money in your pocket.
You said that you have not been able to finish the renovation project even though your father has money into it. If you never finish, the money he spent is gone anyhow. By using your tax savings and having the structure removed for free, you may come out way ahead.