Update: The story has been updated to include the new investment amount from $70 million to more than $150 million. Additionally, the company rebranded from KLA-Tencor to KLA in January.

ANN ARBOR, MI -- A global capital equipment company opened a temporary research and development office Tuesday in Ann Arbor, with intentions of later establishing its second headquarters just outside the city.

California-based KLA moved into a 58,000-square-foot space at 2350 Green Road, where it will operate until a new 230,000-square-foot office opens in summer 2021 at the Ann Arbor Technology Park, off Woodridge Avenue and Dixboro Road in Ann Arbor Township.

The company is planning to hire 500 to 600 new employees, with 100 planned this year.

“This marks a very important milestone for our growth and our future,” said Bobby Bell, the firm’s chief strategy officer. “Key things we’re looking for: Talent (and) the ability to track that talent.”

KLA purchased the site from the University of Michigan for $26.7 million, according to a news release.

“The company decided several years ago to open a second North American site. The cost of living and the ability to get talent and retain it is just really hard in the Bay Area in California,” said John McLaughin, KLA’s Ann Arbor site leader and a UM alum. “We were looking for a place that had a strong pipeline of engineering talent, high quality of life, but a lower cost of living.”

A team of consultants looked at more than 390 sites across the nation and analyzed quality of life, proximity to an airport, the cost of housing and the quality of talent. Ann Arbor fit those categories, said McLaughlin, who’s also served as a corporate relations director for the UM College of Engineering.

Engineering jobs will take up more than 50% of the new hires and the remainder will involve corporate functions such as finance, information technology, marketing and procurement.

The more than 40-year-old company has about 10,000 employees and more than 20 development sites across the world, CEO Rick Wallace said.

“This is the most important new site the company has done in 20 years in terms of our starting from scratch and building out, and it’s because of our confidence in what we’ve seen,” Wallace said.

The new space will not replace its Milpitas, California headquarters.