Microsoft says adios to the Old Pueblo

Katherine K. Gardiner Arizona Daily Wildcat The Microsoft Corp. will sublet its space at the UA Science and Technology Park to Keane Inc. Microsoft is leaving Tucson because an expected increase in demand for telephone-based customer service did not materialize.

Microsoft is leaving the park because the need for telephone-based services, what the site was originally planned for, has decreased, said Jessica Daughetee, a Microsoft representative in Tucson.

Daughetee said the increase in usage expected by Microsoft has not evolved. However, she said the company saw an increase in online-based support.

"People are accessing online support in much bigger numbers than we anticipated," Daughetee said.

Keane Inc., a company in close association with Microsoft, will sublet the original building space, but the move has raised questions about $4 million in funding from the state, county and city. That money was supposed to go to the University of Arizona to pay for the 240,000 square feet left unoccupied until Microsoft was to expand into the rest of the building. Keane Inc. has no plans to occupy the remaining area, Daughetee said.

The funding was to come in several parts: $2 million from the state, $1 million from the city and $1 million from the county.

However, Kendall Bert, director of the city of Tucson's Office of Economic Development, said the city and the UA have not signed an agreement about the payment of funds.

Bert said there was a draft of a contract written by the Office of Economic Development submitted to the UA in October, but the university never returned it for approval by the Tucson City Council.

Democratic Councilwoman Shirley Scott said the city does not have to pay any money because the city did not approve a draft of the contract.

"We are not legally bound to pay any money to the university because there was no formal agreement made. Until you have a signed contract you don't have a deal," she said.

Tucson City Manager Luis Gutierrez confirmed there was no official agreement with the university.

"There has been no final decision made, but the money is in the budget. We just need to review the situation first," he said.

Democrat Raul Grijalva, chairman of the Pima County Board of Supervisors, said that factors that caused him to put the issue on the agenda last year are no longer factors now that Microsoft is abandoning the site.

"There is some dissatisfaction with the intent on the part of Microsoft," he said.

Grijalva said he would make the recommendation to the supervisors not to approve the funding from the county.

Daughetee said Microsoft will still pay its rent to the UA Science and Technology Park.

"We will maintain our financial commitment to the University of Arizona," she said.

Sharon Kha, assistant to the UA president, said there seems to be no question of Microsoft's financial agree-ment with the university.

"They still have to pay. And they were very clear about living up to that obligation," she said.

Microsoft Corp. signed a lease agreement with the UA Science and Technology Park in 1995 and had plans to bring in permanent employees and eventually expand the size of its operation to include the entire park.

Original stipulations of the agreement between the UA Science and Technology Park and Microsoft include:

• Microsoft would create about 200 jobs in Tucson

• Microsoft would hire full-time employees at a salary of $36,000 per year

• Microsoft would average 15 percent to 20 percent of its work force as temporary employees and the other 80 percent to 85 percent as full-time.

Daughetee said the amount of temporary employees has fluctuated according to Microsoft's production needs. An example would be when the company introduces a new product, she said.

The number of temporary employees has been as high as 90 percent of the company's Tucson work force, Daughtee said. She said the company currently has 150 temporary employees, 75 percent of its work force.

Also speaking for Keane Inc., Daughetee said Keane is "very committed to hiring from the Tucson area."

Keane plans on offering positions to the 50 permanent Microsoft employees at the same rate of pay, she said.

As for the 150 temporary workers, Daughtee said they will be given interviews and qualified applicants will be offered positions, though there are no promises about the rate of pay.