Photo by Jon Anderson
The Vestavia Hills City Council meets at Vestavia Hills City Hall on Monday, June 15, 2026.
The Vestavia Hills City Council on Monday night unanimously approved up to $3 million in tax rebates for a proposed Walmart Neighborhood Market slated to go on the site of the former Winn-Dixie grocery store in Cahaba Heights.
Walmart has a contract to buy the property at 3925 Crosshaven Drive and is proposing to tear down the current building and put a 45,000-square-foot Walmart Neighborhood Market in its place, but there are certain costs involved that might push Walmart to choose another site outside the city, City Manager Jeff Downes said.
Walmart deems the former Winn-Dixie building as being obsolete for its purposes and would have to tear down the current building and restructure the underground infrastructure, so there is a $3 million “feasibility gap,” Downes said.
“They could go somewhere else, or they could consider in a positive economic fashion this site in Cahaba Heights,” he said.
If the city were to cover that “feasibility gap,” it could bring a new grocery store to the city and keep those tax dollars in the city, he said. Sales taxes are the No. 1 source of revenue to support city government, and grocery stores are the No. 1 taxpayers of sales taxes, he said.
Instead of providing $3 million upfront, the city prefers to provide the incentive money on the back end as a rebate of tax dollars actually received, Downes said. That guarantees that any incentive payment is a direct result of the success of the store and not a gamble that the store will succeed, he said.
The agreement approved by the City Council on Monday night was to provide Walmart a sales tax rebate of up to 46.875% of actual sales taxes paid over 10 years, not to exceed a total of $3 million. The new Walmart Neighborhood Market is expected to generate about $25 million in annual sales, which would provide the city with $11.1 million in sales tax revenue over 10 years. After the $3 million rebate is applied, which is projected to happen over 4½ years, the city would have a net gain of $8.1 million over 10 years, Downes said.
In addition to the new tax revenue, it also provides a quality-of-life amenity for residents in that community, which is super important, he said.
Councilman Rusty Weaver said most of the comments he has heard from the community about the incentive package have been positive, but some people expressed concerns about the amount of the incentive. Weaver said trying to judge a project like this based on the amount of the tax rebate alone is a “fool’s errand” because there are so many other factors to consider.
The “feasibility gap” is what drives the amount, he said. But you also have to consider what the city gets if the site remains vacant as it has been for more than a year, and that is zero tax dollars, he said. Also, Walmart plans to invest at least $20 million into the property in land acquisition, demolition, construction and related site improvements to make the site operational as a Walmart Neighborhood Market, city records show. The city will gain construction-related sales taxes and building permit fees, Weaver said.
“All of these things create a huge benefit to the city that, when taken in the context of the amount of the tax rebate, makes total economic sense,” Weaver said. “That’s the bottom line for every one of these analyses that we do is – does it make economic sense?”
Other people have claimed the city is setting a precedent by giving Walmart $3 million, but that’s not true either, Weaver said. “Every single one of these requests is taken independently and has to stand on its own,” he said. “Whatever’s happened before and happens in the future has nothing to do with each individual request.”
Vestavia Hills Mayor Ashley Curry said the Walmart Neighborhood Market on U.S. 31 in Vestavia Hills has been an outstanding investment for the city. “If the one in Cahaba Heights can replicate what the one down the street did, we’ll be OK,” he said.
Councilwoman Kimberly Cook said one of the major benefits of this deal is that the city is getting rid of an older building and replacing it with something new and that fits with the improvements the city has already made on Crosshaven Drive in the Cahaba Heights business district in the form of new sidewalks, wider roads and improved traffic flow.
The Walmart Neighborhood Market will come with a new building and new landscaping, she said. “It will be beautiful, so I’m very excited to present this to the community,” she said.
Donald Harwell, a resident in the city, said he’s not at all against the economic incentive package, but he thinks the $3 million should be going to the people who will be shopping at the Walmart, not the company. He would prefer to see the city waive the city’s 4% sales taxes for the first three years the store is in operation so the shoppers benefit, he said.
“Let them have the rebate, not Walmart,” Harwell said. Walmart is expecting to get $25 million in annual revenue from this store. “They’re making money out of this deal, and they’re a trillion-dollar corporation. … I don’t know why we’re giving Walmart $3 million.”
In other business Monday night, the Vestavia Hills City Council voted unanimously to:
- Rezone 3.8 acres at 3034 Green Valley Road in Cahaba Heights between Green Valley Road and Sunview Drive to accommodate 19 detached single-family homes instead of the current nine existing lots. Read more about that project here.
- Allow a drop-off donation center for the Vapor Ministries thrift stores at 3253 Cahaba Heights Road. This would be a drop-off center only with no sales taking place there, and there would be no outdoor storage or donation bins, the nonprofit said.
- Allow a Scenthound dog bathing and grooming business in a shopping center at 3155 Green Valley Road. There will be no boarding or veterinary services offered.
- Extended a cable TV franchise agreement for Spectrum Southeast to continue doing business in Vestavia Hills for another 10 years, adding in a $50,000 performance bond for any damages caused by the company and not resolved in a reasonable amount of time
- Authorized the mayor and city manager to execute agreements to secure manufacturer incentives that will come with the purchase of $1.7 million worth of Motorola police and fire radios that will replace the 2017 models currently being used
- Approved a license to sell alcoholic beverages for Hilltop Liquor at 790 Montgomery Highway, Suite 100
- Extended the deadline for demolition of an unsafe structure at 2750 Smyer Road until Oct. 13 to give more time to properly dispose of asbestos
Downes also gave the council and public an update on the upcoming renovation of Vestavia Hills Fire Station No. 4 in Liberty Park. The city will seek bids on that project later this week and hopes to begin construction in late September, he said. The city also has bids due in about two weeks for 30,000 cubic yards of dirt needed for sitework for expansion of city facilities at the Sicard Hollow Athletic Complex, Downes said.
Another big project almost complete is the installation of the heater for the competition pool at Wald Park, he said. A final walkthrough is scheduled for Wednesday, and the pool heater will be ready for operation when it’s needed later this fall, he said.
Editor's note: This story was updated at 4:36 p.m. on June 16 to correct a direct quote from Councilman Rusty Weaver. Weaver said that trying to judge a project like the Walmart Neighborhood Market economic development agreement based on the amount of the tax rebate alone is a “fool’s errand” because there are so many other factors to consider.
