A highway overpass meant to ease congestion around Microsoft's growing Redmond headquarters will be among the state's first recipients of federal funding from President Obama's stimulus plan, raising objections from groups scrutinizing how the $787 billion is spent.

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A highway overpass meant to ease congestion around Microsoft’s growing Redmond headquarters will be among the state’s first recipients of federal funding from President Obama’s stimulus plan, raising objections from groups scrutinizing how the $787 billion is spent.

The overpass will connect Northeast 31st Street and Northeast 36th Street, bridging Highway 520, which separates the older portions of the company’s large corporate campus from a major new expansion nearing completion on the west side of the freeway.

“They said this is really important to them and we said it’s important to us but we don’t have enough funding,” said Bill Campbell, city of Redmond public-works director, recalling early discussions with the company.

Microsoft committed $17.5 million in funding, 70 percent of the initial cost estimate, as part of a broader 2006 agreement regarding development of the campus. The city would come up with the rest, and even landed $2.5 million in regular federal aid, Campbell said.

As planners designed the project, they saw that because it crosses 520 at an angle, it would more likely cost $35 million to $40 million, Campbell said.

Planners discussed the additional costs with Microsoft — “everything from them contributing all of the increase to some kind of a split,” Campbell said. “I think they’re committed to the total funding that they agreed to at the beginning of the process,” he said. Discussions are expected to continue when the final cost of the project is known.

Meanwhile, the city eyed the deteriorating economy and emerging federal stimulus plan, and applied for Federal Highway Administration funding in the plan to make up the additional costs.

On Thursday, the Puget Sound Regional Council gave the project $11 million, topping the list of more than 50 projects in King, Kitsap, Pierce and Snohomish counties sharing in $214 million in funding distributed through the organization.

Redmond sought bids for the project Friday and expects to begin construction in June.

Watchdog group objects

Without the stimulus dollars, Microsoft would have had to kick in more money or wait longer.

“We will be watching the decisions made by the states very closely to ensure the money is spent appropriately,” said Nick Shapiro, a White House spokesman. “At present, this project still remains under review.”

The fact that stimulus dollars are going toward a project seen to benefit a wealthy corporate giant raised the hackles of taxpayer groups and stimulus watchdogs.

“I’m sure Steve Ballmer or Bill Gates could finance this out of pocket change,” Steve Ellis, vice president of Taxpayers for Common Sense, said of Microsoft’s chief executive officer and chairman. “Subsidizing an overpass to one of the richest companies in the country certainly isn’t going to be the best use of our precious dollars.

“It’s a bridge to Microsoft,” he said. Ellis’ Washington, D.C.-based group, which tracks government spending, coined the phrase “bridge to nowhere” to describe a proposed span in Alaska that got $223 million in federal funding in 2005 and later was canceled.

Project details

The Washington State Department of Transportation (WSDOT) explains the impetus for the project on its Web site:

“The Overlake area of Redmond is growing rapidly, due in part to the expansion of the Microsoft campus. The new bridge will improve traffic flow and provide a critical link to the east and west side of Highway 520. It will provide a direct connection between Microsoft campus buildings on both sides.”

The tree-lined, 480-foot overpass will have one vehicle lane in each direction, pedestrian paths and a bike lane. WSDOT says it will be “an eye-catching gateway to the city of Redmond.”

Other expected benefits include improved safety. Right now, pedestrians, bikes and vehicles traveling east and west through the area share the broad, busy Northeast 40th Street overpass.

The $787 billion stimulus plan, which Obama signed Feb. 17, includes $27.6 billion nationwide for highways, $8.4 billion to improve public transportation, and $8 billion for high-speed rail and intercity-passenger lines. It requires giving priority to projects targeted for completion within three years. States can lose funds if they aren’t allocated quickly.

“This is one of the first manifestations of some of the concerns we had about the stimulus: that you would have the use of federal cash for things that would have been paid for either privately or locally,” said Ellis of the taxpayer group. “We’re really not adding any money, we’re just substituting.”

The stimulus may not boost permanent employment in Washington state, as most of the projects it funds will take just a few months to complete, said Michael Ennis, director of the center for transportation at the Washington Policy Center, a Seattle nonprofit group that studies fiscal issues.

“The state is running around trying to find these little projects that are ready to go,” he said. “These people will all be unemployed again by the summer.”

Campbell said he expects the project to take 16 to 18 months, with completion expected in winter 2010.

Seattle Times technology reporter Benjamin J. Romano contributed to this report.