Retail boom on Old Vail Road

Residents along Old Vail Road are about to see one of southeast Tucson’s biggest retail expansions, with a new Walmart Supercenter, a proposed Costco warehouse and a Sprouts supermarket joining the stores, restaurants and services already clustering near Houghton Road. The development promises more shopping, jobs and city revenue, but it also raises a practical question for people who live, work and commute through Rita Ranch, Vail and Corona de Tucson: Can Old Vail Road handle the traffic that comes with this growth?

Walmart has purchased about 33.23 acres at 10052 E. Old Vail Road for $6.99 million and is pursuing permits for a Supercenter larger than 170,000 square feet. Construction is anticipated to begin in the first quarter of 2027, although the company has not publicly commented on its plans. The site includes nine commercial parcels totaling roughly 1.45 million square feet, with room for possible future expansion. It is near Walmart’s existing store at Houghton and Old Vail roads, as well as The Home Depot.

The current Walmart will remain open until the new Supercenter is ready. After the retailer leaves the existing building, that space is expected to be remodeled or repositioned for two or three other retailers. The new project is also planned to include a fuel center near Old Vail Road. Walmart’s purchase represents a large portion of the remaining undeveloped commercial land associated with Houghton Town Center Phase 2, which covers about 68 acres. The property was sold by Houghton Developers LLC, an affiliate of Diamond Ventures.

Costco is advancing a separate project immediately east of the Walmart purchase. The company is seeking city approval for a warehouse and fuel facility on 22.35 acres at 9748 E. Old Vail Road, in the Rita Ranch Commerce Center. City records describe a project with a warehouse of approximately 162,000 square feet, fuel operations, surface parking and landscaping. Another account described the planned building as 158,000 square feet. The Costco proposal would combine Blocks 4 through 8 of the commerce center and remains under city review.

Together, the Walmart and Costco sites account for more than 55 acres connected to two of the country’s largest retailers along the same section of Old Vail Road, just west of South Houghton Road. Sprouts is also building a supermarket nearby, while other retailers and restaurants are preparing to open or expand. The concentration reflects the residential and commercial growth that has reshaped the Houghton Road corridor and southeast Pima County. For longtime residents, the change has been striking.

Lori Gallegos told KGUN that she returned to the area about six months earlier after being away for 10 years and was surprised by how many stores had appeared. She said the growth was needed because so many people had moved in, while also questioning whether another Walmart was necessary. Gallegos said she is concerned about traffic from shoppers coming from Vail and Corona de Tucson, even as she appreciates having more businesses close to home. In her view, the retail district has begun to feel like a city of its own.

Traffic requirements are built into the city’s development process. Tucson Economic Development Director Mike Czechowski said major developers must estimate how their projects will affect traffic and pay for improvements needed to address the added demand. For Costco, those improvements are expected to include a new turn lane and a traffic signal. The city plans to reimburse eligible costs through a sales tax incentive. The goal is to have development help fund the infrastructure required by development, rather than leaving the entire burden to existing city resources.

The Costco incentive has become part of a broader debate about Tucson’s finances. The City Council approved a $7.3 million tax break for the project, even though sales tax revenues have been weaker than expected. The city commissioned an analysis that estimated Costco could employ as many as 320 people, with a combined annual payroll of $13.5 million. The store is projected to generate about $22.7 million in city taxes during its first five years. The incentive would reimburse Costco for eligible expenses, including nearby infrastructure work and employee training.

Mayor Regina Romero said the investment was worth the foregone revenue, while Council Member Nikki Lee, whose ward includes the proposed Costco, said residents have shown strong enthusiasm for the store. Costco’s project is particularly significant as Tucson tries to attract new business during a period of slow economic growth. A University of Arizona report issued in November 2025 found that employment growth and new business formation in Tucson had declined since 2022 and remained low compared with other Western metropolitan areas.

At the same time, city officials are planning for a tight fiscal year in 2027. Sales tax collections during the second half of 2025 were 1 percent below the same period a year earlier, despite a city budget assumption of 2.5 percent growth. Closures including Big Lots and Sam Levitz Furniture, along with a possible reduction in shopping by visitors from Mexico, have contributed to the weaker revenue picture. City leaders have raised taxes and fees and considered increasing downtown parking meter rates, a proposal delayed after community opposition. Against that backdrop, Old Vail Road is being asked to accommodate not only more stores, but also the infrastructure and public costs that accompany rapid growth. Permitting, entitlement reviews and construction will determine how quickly the projects take shape, while residents will be watching to see whether road improvements keep pace with the retail boom.