The Elyton Land Company, which had founded the city of Birmingham in 1871, established a subsidiary, the Birmingham Water Works Company in 1887. Dr. Henry M. Caldwell, President of the Elyton Land Company, contracted with Judge A. O. Lane, mayor of Birmingham, to furnish the new city with not less than five million gallons of water a day. Without water Birmingham could not have grown into the city that the founders had envisioned.
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This facility was initially completed under the supervision of W. A. Merkel at a cost of $500,000. The remote area lacked roads, and machinery had to be pulled nine miles over both Red Mountain and Shades Mountain by a yoke of six oxen. Coal to power the steam pumps was mined on site, and brick for the buildings was fired at the site. Employee housing formally existed on what is now Cahaba Heights Road. In the mid 1950's, the boiler were converted from coal to natural gas and then to electricity in 1964.
This facility became the nucleus for the New Merkel Community which now known as Cahaba Heights.