Fiat Chrysler said May 21 that construction will begin immediately on a new, $1.6-billion assembly plant for Jeep Grand Cherokees, a new Jeep SUV and hybrid cars on Detroit's east side.

The automaker receives tax breaks and 215 acres of land adjacent to its Jefferson North Manufacturing plant from the city and state in the deal. The land Fiat Chrysler is getting is valued at $108 million and the tax incentives at a savings of $291 million. To put together the land parcels for the deal, the city of Detroit agreed to purchases and exchanges with prominent landowners such as the Moroun family and developer Michael Kelly.

Fiat Chrysler will demolish its Mack Avenue Engine Complex and situate the new production facility, partially, on that site. The Detroit City Council, Michigan's Strategic Fund and the Michigan Economic Development Corp. approved the land deals and community benefits agreements tied to the project between May 14 and 21. Fiat Chrysler said it expects to add 3,850 new jobs at the new assembly line and facility. Fiat Chrysler is also investing $900 million in Jefferson North where 1,100 new jobs are expected to be added.

"Thanks to the strong support of Gov. (Gretchen) Whitmer (D), the Michigan Economic Development Corp. and city of Detroit, I am pleased to confirm that plans to invest in our Jefferson North Assembly Plant and build a new state-of-the-art assembly plant in Detroit have been given the green light," Mark Stewart, COO of Fiat Chrysler Automobiles North America, said in a statement. " This investment enables us to deliver on this promise in the state and city we call home."

Construction is expected to be completed by late 2020 and Fiat Chrysler said in a statement that it expects to begin producing vehicles at the new plant for the 2021 model year. Representatives from Fiat Chrysler would not discuss who the contractor tasked with building the facility is, citing company policy. An executive from Detroit general contractor Walbridge Aldinger Co., which has worked on several major automotive projects in the area, referred all questions to Fiat Chrysler citing a non-disclosure agreement.