The Outer Banks Bar had stood as a street-level recovery center after Hurricane Katrina, an unofficial hub for an inner-city neighborhood that had been left for dead even before the floodwaters came.

No longer do the bar's patrons stare out at the working-class surroundings they helped revive and rebuild, all of it bulldozed away. Sunshine streams through the grimy windows, past the faint outline of the bar's former name, "Cajun Inn," with all of the buildings that had once given shade now flattened for a massive redevelopment project: a $2 billion hospital district spanning 25 city blocks.

Since May, more than 100 homes and businesses have been either demolished or transplanted to other spots around the city. Even though the bar's owner is challenging the city's effort to shut him down, most of the folks who stop by for a cold one after work feel their last drinks are drawing near.

"I worked on a lot of houses in this neighborhood, and now they are all gone," said James McFarland, a 48-year-old Texas native who was drawn to New Orleans after Katrina when he saw images of homes on fire surrounded by floodwaters. "I will hang around until they're all gone, I guess."

From under the bar's overhang, McFarland, an Outer Banks regular, surveyed the flattened landscape where he spent long, hot months laboring with other volunteers to bring life back to their adopted neighborhood.

The bar was one of the first places to reopen in the neighborhood after Katrina. Rebuilding volunteers stayed upstairs, 20 at a time. Cookouts were common for residents and volunteers at a time when company and cheer were in high demand.

On a recent evening, Ricky Stephens looked at the dark, dank bar and seemed unable to fathom losing his hangout.

"This is like a living room with friends and family," said Stephens, a 52-year-old carpenter. "Always been a regular. I'll be here until it closes."

He said that before it's knocked down, he hopes he and other regulars can take a piece of it as a keepsake — maybe a piece of trim or a chunk of the bar.

Gary Pujol, a 50-year-old ironworker, recently strode across the threshold for a cold one on a cold, blustery afternoon, just as he does so many other days. He hollered to the bartender: "Hey, you don't have any wind blockers around here anymore!"

The joke about the loss of the homes across the street sank in with the bartender and manager, Nicole Heltz.

"We never got the sun like this before," she said, squinting into the blinding, golden flash of sun.

Out on the horizon stands the lifeless Dixie Brewery — now a tower of weeds, broken windows and pigeon nests — a reminder of all that was lost in the 2005 storm. Much, if not all, of the two blocks where the Dixie Brewery sits is slated for demolition, though there are undefined plans to incorporate portions of the brewery into new hospital designs.

The lone holdout has been the Outer Banks Bar's owner, Greg Guth, who is fighting the demolition of his bar in court and hopes to keep drinks flowing there beyond the holiday season.

Guth, a retired lawyer, was offered about $173,000 for his property, which he said was too little. He's fighting the eviction order, and his case is on appeal in state court.

"I'm holding out because they're being unfair and heavy-handed," Guth said. "The leverage I got is being there, being in their way. I think the hospitals will be good for the city, but it's also a land grab, pure and simple."

Officials invoked eminent domain to make way for the development. It will include a replacement for Charity Hospital, which served the city's poor and uninsured and has been shuttered since being ravaged by Katrina's floodwaters, and a new Veterans Affairs hospital.

Mayor Mitch Landrieu has repeatedly defended the development as a "transformative project," said spokesman Ryan Berni. Berni also noted that, at the urging of preservationists, $3.2 million is being spent moving historic homes, rather than demolishing them.

Still, there were alternatives to the "urban renewal by removal," said Sandra Stokes of the Foundation for Historical Louisiana, a group that sought to get Charity Hospital reopened and save the neighborhood. She said a recent tour of the neighborhood's "vastness of the space" left her feeling awful.

"It had a visceral effect on me, like a punch in the stomach," she said.

Amanda Jones, a spokeswoman for the U.S. Department of Veterans Affairs, said the project would provide health care for veterans throughout the South and pump billions of dollars into the city's economy.

One veteran, though, doesn't see it quite that way.

"They bulldozed everything down on me when I was 80," said Wallace Thurman, an Air Force veteran who was born in a home a few streets away from the Outer Banks Bar. A stable his grandfather built shortly after arriving from Germany was torn down, and the main house was relocated.

Thurman spent more than two years rebuilding his home after Katrina and even rented another house he owned to volunteers who worked to rebuild his neighborhood. Now, though, he lives in the suburbs — unwilling to go back to see the emptiness of his childhood streets.

"I don't want to go back to New Orleans since they took my house," he said. "I hate it."