Early History: The buildings of Underground Atlanta were constructed during the post-Civil War Reconstruction Era boom, between 1866 and 1871, when the city's population doubled from 11,000 to 22,000 residents. In 1869, the Georgia Railroad freight depot was constructed to replace the one destroyed by Sherman's troops in 1864. The depot, which stands at the entrance of Underground Atlanta, remains the oldest building in downtown Atlanta. However, the depot was originally three stories tall but the second and third story were destroyed by fire. Besides the train station, the bustling district included hotels, banks, law offices, and saloons. An electric streetcar was installed in 1889 to points South, and by 1900 the depot was serving 100 trains per day with direct service between Atlanta and New York City; Cincinnati, Ohio; Chattanooga, Tennessee; Knoxville, Augusta, Georgia; Macon, Georgia; and Columbus, Georgia.
Disappearance: By 1910, several iron bridges had been built to cross the railroad tracks at Union Street. At the suggestion of Atlanta architect Haralson Bleckley, the bridges were rebuilt in concrete and connected by a linear mall between them. Eventually, Bleckley envisioned public plazas between the bridges, but only one, Plaza Park (later Peachtree Fountains Plaza), was ever built.
As the construction took place in the 1920s, merchants began to move their operations to the second floor of their buildings, and turned the original ground floors' storefronts into basements for storage and service. As this occurred during Prohibition, and given the fact that these "basements" were relatively obscured from the city above, some of the basements became sites for speakeasys and juke joints, with music and illegal drinking a common occurrence.
By the end of the 1920s, the street level had been raised by one and a half stories, and a five-block area was completely covered up. For the next forty years, as Atlanta continued to grow at street level, the 12-acre (49,000 m2) area was effectively abandoned and forgotten.
Rediscovery and Restoration: In the 1960s, the original storefronts were rediscovered and many architectural features from a century earlier had survived intact including decorative brickwork, granite archways, ornate marble, cast-iron pilasters, hand-carved wooden posts, and gas street lamps. Two Georgia Tech graduates, Steven H. Fuller, Jr. and Jack R. Patterson, begin to plan a private development there to restore and reopen "the city beneath the city" as a retail and entertainment district. Underground Atlanta, Inc. was incorporated May 2, 1967 and began acquiring options to lease buildings under Central Ave, Pryor, Whitehall, Hunter, Alabama, and Wall Street viaducts. Fuller and Paterson purchased all the corporation's stock in October 1967 and construction began in November 1968. A constitutional amendment was passed in Georgia naming the area a historic site.
On April 8, 1969, "Underground Atlanta" officially opened with new restaurants, bars, nightclubs, and music venues installed in the old individual storefronts. At the time, Fulton County was the only county in the state of Georgia that permitted mixed alcoholic beverages to be served, provided that men wore coats and ties in places that served them. As a result, Underground Atlanta quickly became the center of downtown Atlanta nightlife.
Among the more popular spots in Underground Atlanta were Dante's Down the Hatch, Scarlet O'Hara, The Blarney Stone, The Rustler's Den, The Front Page, The Bank Note, and Mulenbrink's Saloon, where Atlanta's Piano Red, under the name Dr. Feelgood and the Interns, played from 1969 to 1979. Other attractions included a souvenir shop owned by governor Lester Maddox and a wax museum. With the old-style architecture lending considerable charm to the district, Underground Atlanta was compared to Bourbon Street in New Orleans. By 1972, its most profitable year, Underground had 3.5 million visitors and $17 million in sales.
Decline and Second Era: The heyday of Underground Atlanta lasted for only half a decade. When neighboring DeKalb County relaxed their restrictions on alcohol consumption in the early 1970s, new bars sprouted up in other parts of the city, generating competition. The dress code restrictions were dropped and fights began to break out. The construction of the MARTA East Line beginning in 1975 tore out several blocks of clubs and eliminated parking. Crime became uncontrollable and the area was considered dangerous. In 1980, Underground Atlanta was closed. A few businesses struggled to stay open, but by 1982, they left and the area was once again abandoned.
Underground sat mostly dormant for most of the 1980s. Vagrants occupied several of the historic buildings, some of which were consequentially destroyed by fires. In 1982, newly-elected Mayor Andrew Young vowed to reopen Underground as part of his plan to resuscitate downtown Atlanta.
During this time, some of the clubs that were destroyed by the MARTA construction eventually won a claim for damages from federal mass transit authorities and used the money to help revitalize the area a second time. An expensive $142 million renovation conducted by The Rouse Company began in 1987. This included $85 million in city municipal bonds.
On June 15, 1989, Underground Atlanta reopened as more of a modern shopping mall than an entertainment district. Its 140 tenants included the retail outlets Sam Goody and Olivia Newton-John's Koala Blue boutique, as well as a reopened Dante's Down the Hatch in the Kenny's Alley section. Although the historic buildings and architecture remained a major draw, some critics felt that the now-sanitized district had lost its original charm and lively atmosphere.
In August 1990, The World of Coca-Cola, a museum chronicling the history of The Coca-Cola Company and its products, opened adjacent to Underground Atlanta, bringing further influx of tourists to the area. But on April 30, 1992, in the wake of the Rodney King trial verdict, the area was severely damaged by rioters who smashed the windows of stores and restaurants. The following month saw a 40% decline in sales. A new marketing campaign which stated "The Fun in Town is Underground" was designed to help its public image, and although the area saw significant attendance during the 1996 Olympics, Underground Atlanta still ended the year $6.5 million in the red.
Today: Underground Atlanta is once again home to retail stores, restaurants, and several nightclubs and bars in Kenny's Alley. However, it has struggled to attract consistent and diverse patronage. In 1999, the city hired O'Leary Partners to manage the district.
In 2004, in an effort to keep Underground Atlanta from closing a second time, the city passed an ordinance allowing bars in the complex to remain open and serve drinks until 4:00AM -- a last call 90 minutes later than the rest of the city had recently been restricted to. Patrons were also permitted to take their open alcoholic drinks from bar to bar. By 2005, annual visitation in Underground averaged around 6 million people.
Today, Underground Atlanta is primarily a destination for tourists and some venues have sought, in recent years, to attract a more diverse ethnic and cultural clientele. Recently, there was public talk of the Georgia Lottery Commission opening and operating a video lottery terminal casino within the property to attract traffic and diversity, and also to bring the once lucrative but now dwindling convention trade back into the core of downtown Atlanta. The mall's operators proposed a $450 million makeover that would have included thousands of video lottery terminals and a high-rise hotel. The plan, intended to bring several million dollars to the city tax base and generate revenue for statewide education programs, was shelved in early 2009.
On April 7, 2007, after nearly 16 years in operation, The World of Coca-Cola closed its Underground Atlanta location and moved to a new, larger facility near Centennial Olympic Park.
Each New Year's Eve, there is a Peach Drop and fireworks event that occurs in Underground Atlanta, in which a giant peach slowly drops from a tower during the final minute of the year.