By The Associated Press

WEST LAFAYETTE — A northwestern Indiana city has approved tax incentives for Swedish manufacturer Saab’s plans to build a $37 million plant where it will make fuselages for a new U.S. Air Force training jet at Purdue University's research and business district.

The tax incentives approved Monday by the West Lafayette City Council came ahead of the expected start of construction this month of that plant near the Purdue Airport. The plant is expected to be ready by late 2020, the Journal & Courier reported.

Saab announced plans in May 2019 to build a 112,000-square-foot (34,137-square-meter) plant at Purdue’s Discovery Park District where it would make fuselages for the Boeing T-X — touted as the Air Force’s next-generation trainer jet.

Saab expects to hire 200 workers at the plant, bringing an annual payroll of $10 million to the city about 65 miles (104 kilometers) northwest of Indianapolis.

“This is planting a flag in the aerospace district,” said Erik Carlson, West Lafayette's development director.

The approved incentives include a 100 percent abatement over the next five years on $16.5 million in real property investments and a 10-year abatement on $15 million in plant equipment and other property. The abatement will decrease by 10 percent each year over a decade.

Those tax breaks would come to an estimated $2.1 million in savings for Saab over the next 10 years, based on the city’s figures.

Saab has also received other incentives, including an Indiana Economic Development Corp. offer of up to $3.9 million in tax credits and up to $1.15 million in training grants, conditional on Saab coming through on the promised jobs.