KITCHENER — A 43-spot parking lot in downtown Kitchener is slated for redevelopment as a six-storey office and retail building in a sale worth almost $2.4 million.

Staff at the City of Kitchener, which owns the lot at 345 King St. W. are recommending Perimeter Development Corp. for the project, expected to be completed within three years.

The Perimeter proposal was chosen for several reasons, said Brian Bennett, manager of business development in Kitchener's economic development office. But the offered price of $2.35 million for the 0.35-acre parking lot was pretty appealing, too, he said.

"The price that we received is in excess of fair market value," Bennett said. The proposal was also chosen for "the look and feel" of the proposed building, and a plan to use a laneway next to the building as outdoor space in summer, as well as Perimeter's track record, he said.

Perimeter has several downtown projects, including the Breithaupt Block, a former factory that now houses Google's engineering and development headquarters for Canada. Other projects include a 12-storey office tower just down the street from the parking lot at 305 King W. and a $10-million renovation of the Walper Hotel.

The city put out a call in November for proposals to redevelop the lot, which extends from King Street to Hall's Lane.

The city got four proposals by the closing date of Dec. 23, including ones from Maxwell Building Consultants Ltd. of Waterloo for a joint bid by Momentum Developments and Zehr Group of Companies (that proposal was later withdrawn); Intermarket Real Estate Group of Toronto, developer of Sportsworld Crossing in Kitchener and the redevelopment of a large part of Uptown Waterloo including the Waterloo Town Square property; and Vive Development of Kitchener, associated with Kitchener developer Stephen Litt.

"We were really pleased that there were four groups that wanted to invest in the development," Bennett said. "That tells me that downtown Kitchener is a place where people do want to make investments and see the downtown grow."

A committee made up of city staff and Rick Haldenby, of the University of Waterloo's school of architecture, evaluated the proposals.

The committee considered several things, including: the overall design of the building; creative, pedestrian-friendly use of the laneway next to the lot; and a willingness to allow public access to underground parking outside of business hours.

The project is likely to move along fairly quickly. As a requirement of the sale, the developer has to start construction within a year.

"We want to see construction on that site 12 months from now, or earlier," Bennett said.

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Perimeter wouldn't say much Monday about the proposal. "We are pleased that the city has selected our proposal for the property and now we look forward to carrying out the normal due diligence work required in order to complete a commercial property acquisition like this," Craig Beattie, a founding partner at Perimeter, said in an email. "Once we are through that stage, we look forward to providing more detail and sharing our vision for the property."