Destroy the Glades via the "secret" subway tunnels under it, and use a terrorist attack as a cover in order to redevelop the land with skyscrapers (and a memorial).
I don't think the shipwreck being so close to the island was a coincidence. Seems to me that the terrorist group on the "prison island" are connected to Merlyn's council of bad guys back in Starling City, and they'll probably be the ones to plant the explosives or whatever. I'm guessing the Chinese are in on it too; gotta get your funding for all those Skyscrapers from somewhere. China's got the Triad there working some angle, probably as enforcers to see that it goes down as planned. I'm assuming the missile launcher on the island was the terrorist's way of insuring they Chinese don't get cold feet and bomb the shit out of them. Of course Merlyn just killed their Chinese council guy, so that'll probably end up with the Triad becoming a bigger problem for The Hood, though Oliver could always bring in his Russian mafia friends...