Updated 12:30 p.m. | Posted 11:25 a.m.
Arctic Cat Inc. will invest $26 million in a new production line at its Thief River Falls, Minn., factory and hire 40 new workers.
The recreational vehicle manufacturer on Wednesday announced plans for a new off-highway vehicle production line, a growing market for Arctic Cat.
New jobs mean economic growth for Thief River Falls but that will also worsen a long standing housing shortage, according to city planner Mark Borseth.
"There's a housing shortage here," Borseth said. "Arctic Cat is growing rapidly. It's definitely a challenge, but the community is stepping up to the plate to meet that challenge."
Arctic Cat's expansion is just the most recent spike in a growth trend for this northwestern Minnesota city.
Digi-Key, an electronic parts distributor based in Thief River is also expanding rapidly. Borseth said Digi-Key is busing 160 workers in from East Grand Forks, Crookston and Bagley in northwest Minnesota because there's not enough local housing. Digi-Key has been hiring a few hundred new workers each year Borseth said.
The city encourages developers to build something in the neighborhood of 90 new apartment units a year, just to keep up with economic growth. Last year Borseth said development fell behind.
This spring, a number of developers will break ground on apartment complexes. A half dozen projects will add 400 new apartments by the end of next year. For now Borseth said some people will have to stay in hotels.
Arctic Cat also announced a $400,000 investment in engine manufacturing equipment at its St. Cloud facility. That investment is expected to create 10 new jobs.