As far as it goes, you're right.
However, having been declined planning permission to build flats on the basis of the building of historic interest that already occupies the site, the developers thought they'd try to be clever - remove the building, they remove the objection.
They've tried to play the system, as is fairly common practice. Unfortunately for them the council have successfully played another part of the system and shoved it up their arriss.
It was a cynical attempt to try and be a bit clever, but the problem with people who think they're clever is that they rarely are, a lesson that's presumably passed by the businessmen of Tel Aviv.