From the Super Mario Wiki
The Rebel Fort was created apparently some time after King Koopa stole all the spaghetti sauce in Car Land; the main purpose of the Rebel Fort was to act as a safe haven against King Koopa and his Koopa Pack, where rebels against him could create their own spaghetti sauce.
The Rebel Fort was somewhat shoddy in design, being created out of a variety of material, such as old mattresses and tires; various vehicles utilized by Mushroom rebels were also stored in the Rebel Fort.
The Rebel Fort was apparently destroyed when King Koopa used his ultimate weapon, Thunder Birdo on it. Thunder Birdo, using its explosive eggs, caused a large amount of the Rebel Fort to collapse and burst into flames, with whatever being left of the Rebel Fort looking to be uninhabitable.