When will Alabama’s newest Costco open? After 5 year wait, construction nears

The wait is finally over for Irondale. After a grueling five-and-a-half-year journey, the city has officially finalized its development agreement to bring a brand-new Costco to the community.

Construction Kicks Off

Mayor James D. Stewart confirmed during a press conference on Monday that crews are set to begin work this week on the massive project. The development, located at the intersection of Grants Mill Road and Interstate 459, is slated for a 26-month construction timeline, with an estimated opening in late summer 2028.

Reflecting on the long road to this deal, Mayor Stewart acknowledged the obstacles the city faced. "There were some who never thought that a city our size could be able to attract this," Stewart said. "The bigger the project, the more patience that you need. You don’t develop patience unless you go through some pain, and we had a bunch of pain that we went through. But today is a very joyous occasion."

Economic Impact and Future Growth

This $105 million project is expected to be a major economic engine for the city of approximately 13,000 residents. The site will feature a 152,000-square-foot warehouse along with a fueling station. Officials project the new location will generate 200 to 300 jobs and bring in $8 million to $10 million in annual sales tax revenue to fund city infrastructure and capital improvements.

The city, which purchased the land for $3.5 million, has structured performance-based incentives for Costco totaling up to $70 million. These will be funded by an 88% rebate on the store's sales tax, with Irondale retaining the remaining 12%. Mayor Stewart expects the incentive package to be fully paid off within seven to eight years, at which point the city will retain 100% of the tax revenue.

A Long Time Coming

The path to this moment began in December 2020, with retail strategists brought in by January 2021 to formalize the vision. The project survived complex negotiations involving the city, Costco, and the neighboring Mercedes dealership. Now that the deal is sealed, the impact is expected to be significant.

"It’s going to put Irondale on the map and serve as more of a catalyst for other retailers to want to come into the city," Stewart added. "They decided to come to Irondale. We must be doing something right."

When it opens, this location will mark the sixth Costco in Alabama and the second in the Birmingham metro area, with the store expected to draw an estimated 6,000 customers per day. The city is scheduled to host a "blasting meeting" on June 15 to finalize details regarding the ground-breaking and site construction.