In a critical step that could lead the way for development of the Canal Side project in downtown Buffalo, the state agency charged with overseeing the massive project has officially taken control of a key parcel.

Erie Canal Harbor Development Corp.Thursday took over the vacant Gen. Donovan State Office Building along the lower end of Main Street. The move was undertaken so that asbestos remediation and demolition can begin on the 148,000-square-foot, eight-story building. It could be demolished within the next 12 months.

"This is another step in the rebuilding of our waterfront and the realization of the dream that will become Canal Side," said Jordan Levy, Harbor Development Corp. chairman.

The Donovan building, along with its across-the-street neighbor, long-vacant Memorial Auditorium, are slated to be demolished to make way for Canal Side's anchor tenant, a 150,000-square-foot Bass Pro Outdoor World store. Bass Pro is slated for the Aud, while Benderson Development Co. is working with other related tenants for the Donovan site.

The state Office of General Services, New York's real estate and procurement arm, transferred the Donovan title to the Empire State Development Corp., the parent organization of the Erie Canal Harbor Development Corp.

Asbestos removal for the Donovan is expected to cost $4 million. The work is being handled by Op-Tech Environmental, which will also remove and remediate the Aud to make way for its demolition next year. Preliminary remediation work on the Aud began two weeks ago.

"This is the culmination of a considerable amount of hard work by a good many individuals and a great deal of cooperation by several different government agencies that will continue the momentum of recapturing one of our greatest natural resources," Levy said.