Microsoft exit leaves UA with financial woes

Microsoft announced Feb. 19 it would be leaving its Tucson-based phone-in service center. Since then, the University of Arizona has been waiting for decisions by Pima County and the city of Tucson concerning monetary commitments.

The university would have used $2 million from the county and the city to help pay rent on building space left unoccupied until Microsoft expanded into it.

The state promised $2 million over four years in a written agreement and has since made the first payment of $500,000.

The Pima County Board of Supervisors rescinded its verbal offer to put up $1 million at its meeting Tuesday.

"I feel that the university was sloppy in its handling of the Microsoft arrangement, from finances to keeping people in the loop about the status of the deal," said Sharon Bronson, Democratic county supervisor for District 3.

Mike Boyd, Republican county supervisor for District 1, said the deal between the UA and the county was initiated by the UA's Economic Development Committee.

"When using tax dollars to recruit a large business to come to Tucson, you hope to have a sure thing. You aren't as likely to use tax dollars to subsidize a new business you don't know much about," Boyd said.

UA President Manuel Pacheco spoke at the supervisor's Tuesday meeting but has declined to speak about the situation until he has more facts, said Sharon Kha, assistant to the president.

Kha said that during the meeting, Pacheco tried to convince the supervisors to uphold their partnership with the community concerning jobs.

"If they were concerned about jobs, as far as we can tell there would be the same number of jobs available," she said.

Microsoft's deal with the UA included creating 1,200 jobs during the 10-year lease.

John Munger, president of the Arizona Board of Regents, said, "Our main argument was that we were providing jobs to Pima County at the expense of the university. We are actually taking a hit financially to support this venture, and the bodies of government offered to help us with that."

The Tucson City Council is still considering its $1 million verbal promise, but the decision is unlikely to come before the March 6 deadline for the university's consent to sublease the space to Keane.

Keane is a Boston-based company that will offer the same phone-in service as Microsoft did at its Tucson facility.

The City Council decided to table the issue at its meeting on Monday until the city's staff had fully researched the issues, Councilwoman Shirley Scott said.

"We were willing to put up the money only because of the Microsoft name," Scott said. "I believe I am speaking for other members when I say that the name alone caused them to become ardent in their support of this agreement."

The city's main concern involved bringing jobs, prestige and technology to the area as well as giving graduating UA students an ideal place to start their careers, Scott said.

The non-written agreements between the city, county and the university were made before UA's deal with Microsoft dissolved. Since no official documents were signed, both the city and the county are not legally bound to appropriate any money.

The university has until March 6 to give consent for Microsoft to sublease its space to Keane.

Kha said she saw no reason the UA would not approve the sublease, even though the county's money would not be available. She also said the county has expressed interest in making a deal with the university concerning Keane.

Boyd said the supervisors are interested, but the specifics have not been discussed.

"There are several other opportunities that are presenting themselves to us, but I can't really discuss them now," Kha said.

The UA has spent $1.8 million on restorations of the park that include roof repair, parking lots, utility and fire prevention systems, and common area maintenance costs, according to a letter from Pacheco to the City Council.

Kha said the restorations were necessary no matter who leased the space.

"There is a lot of interest in the space. We are not just going to give up," she said.