The city has accepted an offer from Pflueger Group LLC to buy the downtown municipal parking lot known as Block J and redevelop the property as an automobile dealership.

The $10.5 million purchase offer was selected over three others in response to a city request for bids last year, after the unraveling of a deal to lease the 2.4-acre site to an affordable-rent high-rise developer.

If completed, the deal would provide needed money for the city fiscal year ending in June and would define a long-term future for the underused site that for more than 20 years has been targeted for projects such as a bus depot, international trade center, medical building and residential condominium.

Dan Keppel, a Pflueger vice president, declined to share plans for the site because the company has yet to discuss its ideas with council members whom Pflueger representatives expect to meet with next week.

City Budget Director Ivan Lui-Kwan said Pflueger wants to build an automobile sales dealership that could include auto rentals and parts and service operations.

Pflueger also has agreed to operate a 100-stall parking facility charging municipal rates for at least 10 years, Lui-Kwan said.

"It was the best offer we received," he said, explaining that one offer was for a higher price but was conditioned on financing and taking up to 18 months to complete the purchase, unlike Pflueger's offer.

"We’re moving ahead with a very strong and capable buyer," added Douglas Pothul, a broker handling the sale for real estate firm Colliers Monroe Friedlander, which represented the city.

For more than two dec ades, the city has been unable to realize a higher use for the site, which contains 279 parking stalls — 202 for the public and 77 for city employees — that generate $37,000 a month for the city.

In 1982, a Honolulu Federal Savings and Loan affiliate reached an agreement to build a high-rise condo, but the city canceled the agreement in 1985 after it said construction didn’t begin on time.

Block J, which is bordered by Bishop, Beretania, Queen Emma and Kukui streets, in 1987 was selected as the site for an international trade complex called Pacific Nations Center.

That project, which civic leaders saw as a way to help shape Hono lulu as a mid-Pacific financial center complete with a trading floor for the California-based Pacific Stock Exchange, fell apart after the state pushed to make Block J available for residential towers to house University of Hawai'i faculty and low-income renters.

In 1995, Mayor Jeremy Harris proposed fast-tracking private development of Block J and other idle city parcels to help jump-start the then-flagging Hawai'i economy.

The city committed the property in 1998 to a Mainland developer proposing twin affordable rental towers, 100,000 square feet of retail space and about 2,000 parking stalls, including 1,200 for public use.

The city was to receive $8 mil lion for development rights, plus $1.4 million in annual lease rent, and regain control of the property after 65 years upon expiration of the lease.

But after more than two years of developer delays and project modifications, the City Council called off the deal in late 2000.

For several years, anticipated revenue from private use of Block J has been included in the city budget. Most recently, it was considered as a source of revenue to pay for police raises, which are instead being financed by an increase in the motor vehicle weight tax.

Pflueger operates an Acura dealership on Beretania Street, a used-car dealership in Waipahu, used-car dealerships not far from Block J on Dillingham Boulevard and North King Street, and Pflueger Honda on Ala Moana where landowner Kamehameha Schools has redevelopment plans.

Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.

Correction: The time frame for a previous purchase offer to the city for Block J was incorrect in a previous version of this story.