ANN ARBOR, MI (AP) Toyota Motor Corp. said it has signed a deal to buy 690 acres from the state for a research and development center that is expected to add 400 new jobs.

Toyota Technical Center USA Inc., Toyota’s North American research and development arm, said the automaker wants to expand its engineering and research capabilities.

“We believe Michigan is the optimum place for Toyota to expand its home base for North American engineering, development and research operations,” Yasuhiko Ichihashi, president of Toyota Technical Center USA, said in a statement.

The company said it plans to begin construction in the spring of 2006. The first development phase is targeted for a capital investment of $150 million and will add 400 new jobs by 2010.

The site in York Township near Ann Arbor used to hold a state mental hospital.

Gov. Jennifer Granholm and state lawmakers conveyed the 690-acre site to Toyota in September. An Oakland County developer, DPG-York LLC, sued, saying it outbid Toyota by $16 million for the land. Toyota bid $9 million.

The Michigan Court of Appeals upheld the state’s action in February, saying the state had a right to consider other factors besides the price offered, including whether use of the property would attract skilled jobs.

DPG-York’s attorney said the developer is appealing to the Michigan Supreme Court.