It is being demoed, just because it is in such horrible shape. Attainable Homes Calgary owns it (as well as the parking lot to the south across 6th Avenue) and got both parcels upzoned in 2012. Attainable Homes used to have their offices in that building, but moved across 9th Street into the brick office building to the east over a year ago.
I think the building has simply become a liability now, given how poor of shape it was in. I could see water marks on some of the higher exterior walls, even when we hadn't had precipitation for days, which made me assume there had been some pipes bursting at one point. A higher up at Attainable Homes told me it is simply being torn down, no plans for the parcel as of yet.
Given the size of the parcel, I don't think you could fit a tower on site (FAR wise). I would love to see something of the scale of Lido or Pixel built here, but don't think ground floor retail would be necessary (or very successful, given the streets it would front).