Demolition work in Grey St is a sign of high hopes for the future of the Tauranga CBD.
The building, which recently housed the $1, $2, $3 and More Dollar Star store, was demolished on Friday.
Gartshore Investment and Developments director Bill Gartshore said the building had not met the new Tauranga City Council earthquake standards and as a result needed to be strengthened or demolished.
Gartshore had owned the site, which also included the building occupied by The Co-operative Bank, for about five years, he said.
Mr Gartshore said The Co-operative Bank building would be demolished early next year with construction of the new building due to start in January.
Plans were for a single-storey 500 sq m building with about 12 carparks. Half would be leased by The Co-operative Bank and the rest would be a mixture of retail and office space.