Touchstone Corp., the developers of the proposed eight-story Parkplace project in downtown Kirkland, has sold the company’s interest in the project to financial giant Prudential, officials announced Tuesday.

The two companies bought Parkplace in 2007 for $59 million, with a goal of building a mixed-use project that would include 1.2 million square feet of office space.

“Over the course of the economic downturn, Prudential’s appetite for development changed,” said A-P Hurd, Touchstone’s vice president, adding that Prudential’s PRISA II fund is now more focused on smaller projects and value-added acquisition strategies. “Unfortunately, we could not come to agreement on a development plan and the buy-sell in our agreement favored Prudential’s ability to buy Touchstone out.”

Hurd said Touchstone did “everything we could think of to find a path forward” and develop Parkplace within the plans the company developed with the city of Kirkland. As a result, Touchstone sold its interest in Parkplace to Prudential, which now entirely owns the site.

Hurd declined to comment on the sale price.

City officials said the sale leaves the project’s future uncertain.

“At the moment, we don’t know what [the sale] means,” said Kurt Triplett, Kirkland city manager, noting the sale was a surprise to city officials. He said city staff will reach out to Prudential officials this week to see what the company’s plans are for Parkplace.

“We don’t know if they want to sell it or develop it as proposed,” Triplett said. “As soon as we’re able to talk to Prudential, we’ll have a better feel for what’s next.”

But Triplett also believes the sale could prove to be a positive change for the project.

“If anything, it’s likely to mean that something will happen [with Parkplace],” Triplett said. “I do think that the partnership was perhaps locked up in limbo and I think this gives Parkplace a chance to get unstuck. It’s the beginning of new movement with Parkplace, that’s my hope.”

He said city officials consider the project to be one of the city’s top priorities and they will continue to work towards making Parkplace a vibrant economic area, regardless of who owns it.

Triplett added that the city has enjoyed a “very good” relationship with Touchstone and the developers worked hard on the project.

Prudential officials did not immediately respond to requests for comment.