The research center is expected to benefit from the Job Opportunity Building Zone (JOBZ) program, a network of tax-free zones created last spring by the Minnesota legislature and backed by Gov. Tim Pawlenty. The zones free companies of almost all state and local taxes for up to 12 years.

"These are exactly the kind of jobs and the high-quality work that we need to invest in and retain for Minnesota to remain competitive and for our economy to grow," says Pawlenty, who added that the incentives were critical to the company's decision to expand in Minnesota.

Medina-based Polaris, maker of snowmobiles, motorcycles, all-terrain vehicles and personal watercraft, will consolidate research and development done in three locations here, a town just off I-35 in southern Chisago County. Much of that research work is now done in Spirit Lake, IA, and Osceola, WS, where Polaris has manufacturing plants, as well as its snowmobile plant in Roseau, MN. Polaris has about $1.5 billion in annual sales.

The 620-acre local site will allow for on-site field-testing and will provide room for future expansion. The city was selected from a list of potential sites following a 16-month national search, says Polaris president and CEO Tom Tiller.

Other state aid includes an interest-free loan of $500,000 for 10 years to help cover the costs of the expansion through the Minnesota Investment Fund, and a grant of $1 million to re-route a county road around the perimeter of the property through the Greater Minnesota Business Development Infrastructure Grant Program.

Locating in the upper Midwest was a logical choice for Polaris, since all of its domestic operations are within a 300-mile radius of Minneapolis, the largest market for power sports products, Tiller says. The competitor was Osceola, which is about 20 miles east of Wyoming, just across the St. Croix River; the terms of that offer were not disclosed.

Tiller says the incentive package wasn't the only reason to locate the center in town. The state's quality of life, its educated workforce and other Minnesota attributes played a role. Construction is expected to begin in 2004 and should be completed in late 2005.