Traffic would continue to increase around Microsoft's headquarters in Redmond if the company expands by millions of square feet.

But residents wonder whether proposed street and freeway overpass projects could handle the added traffic and keep vehicles moving.

Redmond City Council continued to pick through the fine points of a proposed development agreement with Microsoft during a special meeting last night. The agreement spells out how Microsoft plans to expand its Redmond campus by 2.2 million square feet during the next 10 to 20 years.

"We are progressing, but the City Council needs to go step-by-step through this agreement," said Redmond Mayor Rosemarie Ives. "I'm optimistic about the development agreement. I think it's a good tool for us to work on together."

The expansion would include about 16 new buildings and accompanying parking garages and would allow the company to hire 10,000 to 20,000 new employees, said Jim Stanton, Microsoft's senior community-affairs manager for real estate and facilities.

As part of the proposal, Microsoft would agree to pay for about $30 million in transportation and infrastructure improvements. The largest chunk of cash — $15 million — would go toward a bridge extending Northeast 36th Street over Highway 520.

Microsoft also would pay to install new traffic signals near the campus and improve storm-water basins.

The City Council is expected to continue discussing the issue at its next regular meeting April 5.

A handful of letters from residents of Bellevue's Bridle Trails and Sherwood Forest neighborhoods, near Microsoft's headquarters, were included in a packet of information distributed to the council.

Many of the residents expressed concern that the council continue to follow a Bellevue-Redmond agreement on how the Overlake area — where Microsoft is located — should be developed. The two-city agreement puts a cap of no more than 2.8 million square feet of new development in the Overlake area and lays out what traffic improvements should be made to handle additional vehicles.

Residents such as Linda Lowe-Sheedy said they are concerned some of the details of the agreement, known as the Bellevue/Redmond Overlake Transportation Study, are being put aside as both cities look at Microsoft's proposal.

Lowe-Sheedy said they fear that putting a traffic signal at the main campus entrance on Bellevue-Redmond Road could help push traffic onto nearby residential roads.

Microsoft officials point out that they already own the land they want to develop, and even if the City Council were to reject the development agreement, the company could keep developing the campus in a piecemeal way.

"We've done a lot of analysis in support of this proposal," said Chris Owens, Microsoft's general manager for worldwide real estate. "We believe if we follow the planning and guidance laid out by Redmond and Bellevue, I feel confident that it will address their concerns."

Rachel Tuinstra: 206-515-5637 or rtuinstra@seattletimes.com