As a kid, I would look out the car window as we drove past this thing sitting out in the bay. I always called it "the Castle."
It's actually the far end of Muscogee Wharf. Pensacola used to be a booming port city with an easy dozen long piers fanned out into the bay and ships tied up along each one, loading or unloading, dealing in lumber, cotton, grain, all the commodities of the day.
Today, about all that's left is a much smaller port and the remains of Muscogee Wharf. This one used to reach about a quarter mile from shore. The "castle" was actually part of a ship-coaling station owned (like many of the piers) by the L&N Railroad.
A fire in 1955 destroyed much of the wharf. It was never rebuilt. Just after Hurricane Ivan in 2004, construction began on a small development of "luxury homes" at the land end of the old wharf. There were supposed to be 13 of these, but to date maybe only 5 such houses have been built.
I wonder if any of those luxury-house buyers realized that the city sewage treatment plant was just down Main Street from them before the new one went online in mid-2010. All it would have taken was a little breeze from the south.