GRAND FORKS, N.D. -- A tourist attraction this city hopes will pull motorists off the I-29 faster than a highway patrol car may finally be built by a Winnipeg company.

City council here has given preliminary approval to Canad Corp.'s proposed $50-million Cdn entertainment complex, including a 192-room hotel, a movie theatre and a 30,000-square-foot indoor water park.

The project is greatly ratcheted up from the $20-million hotel Canad Corp. proposed last year.

The entertainment complex will be in plain view beside the I-29 Interstate highway and connected to the $100 million Alerus Center, the city's indoor football arena and conference centre.

The proposal seeks several concessions from the city, including some tax forgiveness and a $1.5-million fund to promote Grand Forks in Manitoba in the next five years. Grand Forks is about a two-hour drive south of Winnipeg.

The indoor water park is the key. City officials believe Grand Forks lacks an attraction that convinces families to bed down for a night. "This is huge," said the receptionist in the city's Visitor Information Centre. "We get questions all the time about whether we have a water park."

"The water park will be finest and largest in the region. You'd have to go to Edmonton, or Toronto or Minneapolis to find a larger one," said Canad CEO Leo Ledohowski.

Grand Forks Mayor Mike Brown complimented Ledohowski for resurrecting a project that looked dead just three months ago.

"Leo's like a running back you can't take down," said Brown.

Brown made the indoor water park a key plank in his election platform. But the aquatic centre was turned down by Grand Forks residents in a special vote in October.

Voters were asked two questions: 1) Do you favour the city building a water park? 2) Do you favour a quarter per cent sales tax increase to help pay for the water park and other infrastructure like street repairs and dike maintenance? Voter response was 68 per cent opposed to the water park, and 53 per cent opposed to a sales-tax increase.

Last week, Canad Inn broke the impasse by offering to build the water park itself. It will also build a state-of-the-art movie theatre, in addition to the hotel.

In return, Grand Forks must forgive property taxes for five years. A five-year, 100 per cent tax abatement would be worth $3.1 million to $3.5 million US to Canad Inn.

Brown said the forgiveness of property taxes is money the city wouldn't have had anyway. After five years, the city expects to generate between $620,000 and $700,000 per year in property taxes from Canad Inn.

Canad Inn will also immediately generate millions of dollars in additional sales and hotel tax for the city. The complex is also expected to create several hundred jobs.

Brown said the referendum was a learning experience. "It opened peoples' eyes to the necessity of a recreation park. We would not be where we are today if not for that vote," said Brown.

Grand Forks council is expected to give final approval to the Canad Inn complex on Feb. 9.

Members of the local government went to great lengths to research the project, including a visit to a water park in its sister city Sarpsborg, Norway. About half of Grand Forks residents trace their ancestry back to Norwegian immigrants who settled here in the 1870s.

"We did the water slide in Norway and it was a blast. They said it's been tremendously successful," said Brown. The Canad complex fits with Grand Forks' aim to make itself a destination centre, and with North Dakota's new thrust to develop tourism as a primary industry.

Canad Inn will complement the Alerus Center, which has seating capacity for more than 19,000 people and extensive convention capabilities.

Canad Corp. is also building a $16-million, 160-room hotel adjacent to the Keystone Centre in Brandon this year. Construction is expected to start in a few weeks.

Grand Forks has been undergoing a revitalization since the Flood of the Century in 1997. It has added the Alerus Center, Grand Forks Market Place, King's Walk, an 18-hole golf course designed by Arnold Palmer, and the $135 million Cdn Ralph Engelstead Arena. There is also surge in housing starts.

The development is partly due to funds from Washington to compensate for the 1997 Flood of the Century. In the case of the Engelstead Arena, that was money donated by the wealthy former resident.

The setback from the special vote will prevent Canad Inn from opening for the World Junior Hockey Championship in Grand Forks in December. The complex is not expected to open until early 2005.