Gramsci have you made an official complaint to the council yet about the Short Life Housing Project Manager, and the actions instigated / statement about not wanting to work out a compromise etc?
If not, please do so, as only once you've made a complaint via the council can you then make a complaint to the
local government ombudsman, then once you've done that you can take it to judicial review if necessary.
It sounds like the council is abusing laws that are not intended for use in these situations, as well as abusing the agreement they have with the short life tenancies in these areas, and prejudicing the results of the consultation being carried out for the regeneration plan of which your co-op is an intrinsic part, so multiple grounds for judicial review.
I had a quote of around £10k for the legal costs of taking something to judicial review, as a guide, which IMO ought to be a figure that could be raised with the depth of support you obviously seem to have for this.
You don't need to take this lying down, and you don't need to allow them to dictate the terms of this fight - take the fight to them, put them on the defensive, and they may well decide that compromise is actually not such a bad idea... if not, then please do follow this through as either an ombudsman decision, or judicial review will stop the council's actions in its tracks, not just for you, but for all other short life co-ops etc that might be threatened in this way.
ps If the council officers, and lawyers are reading this - please take note of this post, these options are available, and can be used to stop you from overstepping your legal powers in the way that you clearly seem to be doing. It's not usually seen as a good career move to have an ombudsman or judicial review finding against you, so please take a step back from this and take the compromise agreement that is on offer from the Co-op. You've stirred up a hornets nest here, and a fighting fund can fairly easily be established to force you to stop your attempts to bully this long standing co-op into submission.
As someone who has been part of setting up and managing a £58 million community regeneration programme, I can only say that your approach to this is shockingly bad, and shows a huge amount of disrespect for a long established community who actually have helped to keep that area and prevent that building falling into decay for several decades, at their own expense. If you want to have your actions used as a case study of how not to do regeneration projects, you're going the right way about it at the moment from what I can see.
Obviously it's your call, but if you think about it, you know I'm right here - successful community regeneration programmes do not start by ripping the heart out of the area first.