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Saturday, January 08, 2005 - Page updated at 12:00 A.M.

Microsoft to add space, 12,000 jobs

Seattle Times technology reporter

Microsoft's disclosure yesterday that it plans to add 10,000 to 12,000 new jobs in Redmond will boost the economy and encourage other businesses to locate in the region, according to state and local officials.

The company announced yesterday that it is seeking the city's permission to redevelop its campus to accommodate the new employees over the next 10 to 20 years, cementing its commitment to the Puget Sound region.

Under its plans, the company would start construction on the first of several new buildings in 2006 and build others up to five stories high as needed on both sides of Highway 520. Altogether, it plans to build 2.8 million square feet of new space, the equivalent of two Columbia Towers.

Although the growth is roughly on pace with Microsoft's expansion in recent years, the company has never before publicly disclosed details of its long-range hiring plans in the region. The information could ease recurring concerns that Microsoft may someday move its headquarters, as Boeing did.

"We all have [worried] when the topic was outsourcing and Microsoft opening a new India office or the office in China," said Chang Mook Sohn, the state's chief economist. "But this really reaffirms that the most important activities of the company will be centered in the metro area."

Sohn said the disclosure of Microsoft's growth plans is "really great news for the state's economic future."

Technically, the company is filing for a development agreement that would serve as a blueprint for campus expansion, but it would not obligate it to meet specific building goals or hiring projections. Jobs will be added as needed, said Chris Owens, director of campus development.

"We are making a commitment to focus our development in Redmond with the development agreement," he said. "We're trying to send a message to the region, to the city, that we're committed."

To offset the effects of the growth, the company will provide $30 million for infrastructure improvements and help Redmond lobby for regional transportation improvements such as the second phase of Sound Transit.

Included in the $30 million is most of the funding for a new overpass that would extend Northeast 36th Street over 520, easing congestion on other nearby overpasses.

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The development agreement will undergo public hearings and Redmond City Council review. Microsoft will host an open house to discuss its plans with the community on Jan. 27; a time and place have not been chosen.

Microsoft has been discussing the project for several months with the city of Redmond, according to Mayor Rosemarie Ives, who said she has long pressed the company to develop a formal growth plan to better coordinate regional planning efforts.

"We're real comfortable that that amount of growth over the next 10 to 15 years is very accomodatable," she said.

Chief Executive Steve Ballmer and Chairman Bill Gates have repeatedly said the company will remain based in Redmond but overseas expansion, particularly a new development center in Hyderabad, India, has raised concerns about future growth in its hometown.

Microsoft plans to begin designing the first building in the project this year, to be built on an undeveloped area near Northeast Bellevue-Redmond Road.

Microsoft moved to the Redmond campus in 1986. About 28,000 of its 57,000 employees work in the Puget Sound area, mostly on the main campus.

In its fiscal year ending in June, the company plans to increase local employment by several thousand jobs. Globally, it plans to hire 6,000 to 7,000 people.

Microsoft owns 7.5 million square feet of building space and leases 1.7 million square feet of building space in the region.

When Microsoft was growing quickly in the late 1990s and Redmond had imposed a growth moratorium on commercial businesses, the company acquired options on land in Issaquah for a campus that could house as many as 12,000 employees.

Last fall it gave up about half the land and kept enough for a campus with perhaps 5,000 people. But Owens said there are no plans to proceed with that campus for the near future.

Issaquah Mayor Ava Frisinger said it's not surprising that Issaquah is on Microsoft's back burner because it was always a fallback option for the company.

Dick Larman, state director of business development, said Microsoft's arrangement with Redmond could give a new meaning to public-private partnership, a commonly used term that generally refers to financing arrangements, instead of true planning

Larman also said Microsoft's announcement speaks to some of the current rhetoric about the state's allegedly poor business climate. "It proves the point that Washington is not a terrible place to do business, it's a good place to be," he said.

Brier Dudley: 206-515-5687 or bdudley@seattletimes.com

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