***** NOT A TEACHER *****
Thank you for your very interesting question.
Yes, I have read that country X is tearing down many older parts of its cities in order to build "modern" structures. (Personal comment: How sad!)
This is how I interpret your underlined sentence:
Although the city government ignored Feng's efforts to protect the street, it did make one concession: the oldest
building on that historic street would be preserved. (All the other buildings would be razed.)