I'm quite familiar with that block. It is my belief that knocking down most of that block will actually help preserve historic buildings. Because none of the homes are being maintained at all, they have rotted away and are beyond the point of being salvaged. Once a majority of a block reaches that point of decay, none of the remaining residents will ever sink money into their homes. The remaining homes will slowly decay and eventually be sold for projects such as this.
The one exception might be the larger industrial building that currently stores old carousel equipment (i think). Is this building worth saving? I really can't decide.
(Jon Pratt on Smugmug
http://www.jonpratt.com/keyword/peda...le/i-Rxz7J54/A)
(Jason Harris on flickr
http://www.flickr.com/photos/crazyma...n/photostream/)
But otherwise, the block is dragging the neighborhood down and is a disincentive for anyone to do property upkeep. Here is a typical home; wood siding covered with asphalt shingles covered with multiple layers of unpainted oriented strand board.
(Jon Pratt on Smugmug
http://www.jonpratt.com/keyword/peda...le/i-BLvrRTt/A)
When this block is bulldozed and rebuilt, owners in the neighboring blocks will have some incentive to maintain their properties. Or at least that's my theory. Sometimes it is necessary to demolish buildings in order to plant a seed for regrowth in a neighborhood. Sacrifice one of the worst blocks in order to spur upkeep of the surrounding blocks.
Granted, it is always debatable which properties or blocks should be scarified. And on top of that, people looking to develop property do cite this philosophy as justification for knocking down perfectly viable historic structures. In this particular case, I think it will actually save more than it destroys.
Edit: Hmmm, apparently I don't know how to embed picture links. Only the citations show up. Perhaps these sites are blocking inline references from outside sites.