I was hoping they'd go that route, but it's sitting right beside (connected to, really) the existing Inn on the Park, and there's three condo towers on the same site as well.
I think the real reason is that they're doing reclaimation of materials. Looks like the rebar, steel and other materials that can be recycled are being picked out and piled up on site.
There was an article about this method in the Star a few weeks back. The Molson building at Bathurst and the Lakeshore is being dismantled in the same manner.