The former Woolworth department store at the corner of Canal and North Rampart streets, once the site of lunch counter sit-ins during the civil rights movement but long vacant and blighted, is being torn down to make room for a high-rise mixed-use development.

A construction crew began demolishing the 1940s-era building this week. It will be replaced by a $70 million residential and retail complex, a formerly controversial project that was first introduced seven years ago by developer Mohan Kailas.

According to plans on file with the city, Kailas plans a 17-story building, with the first and second levels to include 85,000 square feet for shopping. A 467-car parking garage would occupy floors three through seven. The rest of the space would be dedicated to 240 condominiums, including penthouses on the top two floors.

The development, called 1031 Canal Street, will include a pool, gym, theater and banquet room.

The project has been in the works since at least 2007, when Kailas bought the building for $3.6 million after plans for another redevelopment project fell through. A website,, was launched in 2009 to promote the project.

But it has run into several speed bumps on the road to becoming a reality.

Opponents argued that the building’s modern design would not be in keeping with the character of the historic Vieux Carre. The building is in the Central Business District but on the edge of the French Quarter, the city’s oldest neighborhood. Some critics also said a residential building would not honor the site’s significance in the civil rights movement.

Supporters, however, said the development would bring a needed shot in the arm to an economically depressed corner, which had not yet seen the revival of the Saenger Theater following Hurricane Katrina.

Most of the controversy, though, centered on the building’s height. As proposed, the new building will stand 190 feet tall, or nearly three times the height allowed under current zoning law. The new zoning ordinance under consideration by the City Council would raise that limit to 120 feet. An earlier version of Kailas’ plan proposed a 213-foot building.

In late 2010, the City Planning Commission denied a conditional use request that would have allowed Kailas to build at that height. The body approved a 190-foot tower in August of the following year. At the urging of Councilwoman Kristin Gisleson Palmer, the City Council followed suit later in 2011, and Kailas secured city approval for his design in 2012.

The following year, Praveen Kailas, who had been the lead spokesman for the project, pleaded guilty to fraudulently billing a state Katrina recovery program. Praveen Kailas, the son of Mohan Kailas, pleaded guilty to one count of conspiracy to commit theft of government funds and one count of theft of government funds. The scheme was initially exposed by WWL-TV.

Until demolition began this week, the project had remained out of the public eye as Mohan Kailas secured permits for demolition and construction. Construction on the building is expected to be completed in the summer of 2016, an attorney for the project said.