Demolition has begun at the southeast corner of Yonge and Bloor Streets to make way for a condominium and five-star hotel and shopping development.

The 1 Bloor tower, located in the fashionable Yorkville district, will stand 80 storeys and will be the tallest residential structure in Canada.

Officials from developers Bazis International and the city were to mount a tracked excavator with a huge set of steel teeth and then "take a bite out" of the existing building at the busy intersection.

To celebrate the "significant moment in the city's history," Bazis says it is erecting a 10-foot plasma screen at the corner, which will show a video retrospective of the past 100 years at Yonge and Bloor.

The old photographs will show horse-drawn trolley cars and Model T Fords crossing at the intersection, which was the site of the city's first traffic light, Bazis said in a press release.

"(The retrospective) will be a celebration of the spirit of Toronto ... The past as prelude to the future," stated the company's Michael Gold.

Coun. Kyle Rae was on hand for the event. He said the intersection of Yonge and Bloor is "paramount in Canada."

"It's very important for retail, for office, for commercial, and it really was underdeveloped, underwhelming to visit," Rae said.

It was a chaotic scene when sales of the anticipated condo units first went on sale last November. Realtors paid people thousands of dollars to stand in line for a week in frigid temperatures to get a first crack at the hot property.

The demand was so high that developers raised the starting price of their units to $500,000 on the day they went on sale. Others were priced at more than $8 million.

The night before, the price range for the units was $300,000 to $2 million.

The project set a record for the most expensive unit sold. A businessman from Hong Kong purchased the top floor penthouse unit for $25 million. His new home will take up the entire 80th floor of 1 Bloor St., giving him a spectacular 360-degree view of the city. The penthouse will have its own private swimming pool and outdoor garden.

The buying frenzy erupted into pushing and shoving in sections of the line. Police officers were stationed at the location to monitor the crowd and maintain peace.

The tower is not expected to be built before 2011.

With a report from CTV Toronto's Roger Petersen