Fourteen City of Redmond jobs are being eliminated because Microsoft Corporation is halting some construction projects which were due to be completed in April 2010.

In April 2007, the city entered into an agreement with Microsoft to provide enhanced building permit review and construction inspection services for the major development projects then underway at various Microsoft campuses in Redmond. Through the agreement, Microsoft agreed to fully fund 14 city staff positions needed to review and inspect the construction permits.

“The city provides a regulatory service. Any development has to go through a city process,” said Redmond Mayor John Marchione. “The three-year agreement was to end in 2010.”

By funding the 14 city staff positions, “they were buying predictability and dedicated technicians for their projects,” Marchione explained.

However, Microsoft announced last month that certain construction projects will not be completed and exercised its option to terminate the agreement effective June 30, 2009.

Jim Roberts, assistant planning director for the City of Redmond, said the affected construction projects are Microsoft Buildings 81 and 83 on the old Safeco campus, at Northeast 51st Street and 156th Avenue Northeast and a parcel on the old Nintendo property, at the Northeast corner of Northeast 51st and 148th Avenue Northeast.

On the site of Building 83, there was to be a parking lot with an office building over it. Work crews have completed the project up-to-grade but will not construct the building above it. Construction on Building 81 has not begun. Those projects had been anticipated to wrap up by 2010.

At the former Nintendo property, Roberts does not forsee any building to begin until 2013 or 2014. As such, the city had expected to extend the existing agreement with Microsoft.

Marchione confirmed that all 14 city staff positions created through the Microsoft construction agreement are being eliminated and said that those employees are eligible to apply for job vacancies within the city.

“There are no new jobs, but they can apply for existing jobs,” he clarified. “About half will probably find jobs within the city.”

We asked Marchione how the strained economy is affecting city operations and staffing, in general.

“Sales tax is down about two percent from budget,” he remarked. “There is trend downward in real estate excise tax, so some lower priority capital improvement projects are being put on hold.”

These include some improvements at the Public Safety and Public Works maintenance buildings, he reported. But major projects such as the Bear Creek Parkway Expansion are proceeding as intended.

“Overall, city staffing is holding steady,” Marchione stated. “I have a standing order to approve new hires before they are advertised. We budgeted very conservatively and while it was compact or tight, we’re in a better position than some of our peers such as Kirkland and Lake Forest Park.”