I'd be awfully surprised if the business owners did not have insurance. I think Admiral probably has it right; most of these owners will take the money and run (as is their right).
Much as it is a disaster to see heritage buildings gone, I don't think there should be an attempt to rebuild them just as they were before. Such efforts are easily spotted as fake. Surely a good architect or two could create something here that is up to date, yet fully respectful of the surroundings. I envision street retail, hopefully several relatively small stores, with two or maybe three levels of apartments above, and with a generous use of brick as one of the elements to blend in to the existing form of the street.
I can't believe the city would allow anything resembling "big box" architecture. Even a so-called big box store such as Home Depot has recognized that in these inner-city locations, a different design is required.