What is the minimum lot size in the area? Perhaps you can find a developer that will subdivide and build SFR on it. Or you can subdivide and build. However, if you have not done development such as this before you probably should leave it to someone with the experience.
It may also be difficult to sell any SFR in today’s market. Depending on where in Cali it is, likely you are at the top of the market and starting a development project will leave you at the end of the crest and on the way down by the time the red tape gets cut through.
Can you afford to hold the land? Can you sell it? Can you afford to fix up the building; it sounds like from your post that it may be way to dilapitated to even go that route for you? If you can fix it up, would it qualify as a variance and be grandfathered at it’s current zoning; again, based upon your post it sound like it isnt’?