This sentence structure would be considered incorrect in English. You would say , "We have already seen this historic street." You just don't put an object in the front of the sentence and refer to it with a pronoun later in the sentence. It is wrong!!!
You might say, "This historic street , we have already seen with no "it." This is still awkward but not totally incorrect. You marked this wrong. You would never see or hear the sentence structure that you are marking as correct.