Demolition contractors have begun work on reducing the former Salvation Army Citadel to rubble.
The Lord Street site is to become a 44-bedroom hotel.
Demolition of the Citadel began with the removal of roof slates before the work to knock down the walls began on Thursday morning.
Keith Lord, of Hesketh Investment Limited, secured planning approval (23/00616/B), and registered building consent (23/00617/CON), in August 2023 to demolish the Citadel. An appeal was dismissed in April 2024 following a planning inquiry.
Recommending approval, the planning officer said the existing building, which was built in 1932, was ‘not considered to be of significant architectural or historical interest to seek its retention nor to make a particularly positive contribution to the character or appearance of the Conservation Area’.
The hotel which will replace it will have three floors and be finished mainly in red facing brick, and will feature a ground floor restaurant and bar.
In his application, Mr Lord said the hotel would create 16 full-time jobs ‘within a range of occupations and skill levels with an average annual salary of £30,000’.
Hesketh has also been given planning permission to convert the distinctive Art Deco-style Royalty Building on Walpole Avenue into a 64-room hotel and spa.
The Salvation Army moved out of the Citadel in 2017 saying it was no longer fit for use and having abandoned plans to rebuild, arguing the costs of doing so had escalated by more than 70%, making it uneconomic and outside the resources of the charity.
It opened its newly refurbished church and community centre in the Isle of Man Business Park in May last year.
Lower Church Street will be closed until Monday, April 14 while the demolition is carried out. Lights are controlling single carriageway traffic flow on Lord Street.