Removing a city
From #openttdcoop wiki
Sometimes when building the main line, side line or a station you come across some towns. Sometimes you have to remove them so there is more room for our networks. (Please note that this isn't cheap and only perform this when there enough money. Otherwise place a sign and wait until there is more money).
Removing is done in several steps:
Removing the first buildings
First check the rating of the authorities of the town. If it's Very Good or better start with removing some buildings like a football station, church or offices. These all need a rating of Very good or better. Removing a simple houses will be done later. Repeat the process until the rating drops to Appaling, then move on to the next step.
If you don't know which kind of building everything is, use the "Land area information tool". It's the last button in the topside buttons bar (with pause, settings, save, map etc.). If you still don't know if a building can only be removed with Very good rating or higher start with the buildings that look the most expensive.
You've been removing quite a bit and your rating has dropped to Appaling and local authorities will not allow further demolition. It's time to raise the town rating. Remove everything in between a range of about 10 to 20 tiles from the town center (mind any laid out tracks, stations or purchased land). When you've removed everything from these tiles plant trees on the bare tiles. Just one tree per tile is enough (only drag and drop once). Repeat this until you have reached a Good or higher town rating and continue with the next step. Do not use the bribe option, which is expensive and will lead to being discovered and an unwilling town.
Removing some (cheap) buildings
Now that your rating is increased to Good or better it is again time to remove buildings and roads. Start with removing houses at first and when that is not possible anymore try removing some roads. It appears that you can demolish up to 7/ 8 road pieces or 2 houses + 1 road tile at a time. When the town rating has dropped to Appaling again repeat the tree planting step. Do so until there are only buildings left that can't be removed (statues for instance).
Removing the last buildings
If it wasn't a very big town, the result you have now must be only a few buildings left. Now it's time for the expensive part: Bribing. To save money, make sure your rating now is Good and if it is not the case plant some trees. Bribe to get an excellent or outstanding rating and remove the final buildings. If your ratings has dropped again try to increase it first by planting trees otherwise attempt another bribe. Now the town is removed completely. If town growth is turned on purchase the tiles around the center to prevent future growth, a rectangle of 10 by 10 tiles will do.