The owners of Underground Atlanta are seeking a $40M boost from the city to build 30 above-ground stories of housing.

Lalani Ventures, in partnership with New York-based Exact Capital, plans to build a mixed-use apartment tower that spans 405 units of student, income-restricted and market-rate housing, art incubators, retail and public spaces, according to documents filed with Invest Atlanta, the city's economic development arm.

The project would have a total cost of $160M, Lalani CEO Shaneel Lalani told Bisnow over the phone Tuesday. The site at 76 Wall St. is home to a single-story retail plaza at the street level of Underground Atlanta. It is next to a multistory parking deck.

The tower's financing would also include a $22.5M taxable construction loan and $7.5M in federal and state tax credit equity, according to the filing. It also projects $77M in permanent financing to include more than $55M in federal and state tax credit equity. Berkadia is listed as the construction and permanent lender, while U.S. Bank is listed as the investor in the federal and state low-income housing tax credits.

The filing says 163 units are slated to be restricted for renters earning up to 60% of the area median income, with those monthly rents ranging from $971 for a studio to $1,225 for a two-bedroom unit.

Lalani told Bisnow the firm will seek construction financing once Invest Atlanta approves the incentive. The project would give a much-needed boost to the activation of Underground Atlanta's retail ecosystem with the influx of permanent residents, he said. MARTA's Garnett Station is also four blocks from Underground.

“This is a win for everybody,” Lalani said.

The project is expected to take two years to build and be delivered in 2027, according to the proposal.

The apartment tower, described in documents as Phase 1, is the first concrete development plan Lalani has pursued since purchasing Underground Atlanta in 2020. Lalani paid former owner WRS $31.6M after the South Carolina-based developer failed to move forward on the iconic destination’s redevelopment.

In 2022, Lalani floated conceptual plans for the first phase of Underground’s redevelopment, which included student housing, co-living, office, a hotel and additional retail rising above the 12-acre property bounded by Pryor and Alabama streets in the heart of Downtown Atlanta.

In the 1960s, Underground became one of the city’s top nightlife destinations, especially in the subterranean, nightclub-lined portion known as Kenny’s Alley that includes such renowned clubs as Dante’s Down the Hatch, Scarlett O’Hara, The Front Page and a wax museum.

By the 1980s, as the nightclub scene shifted to Buckhead, Underground was revived as a shopping mall, but it has stagnated in the years since.

Invest Atlanta’s Urban Residential Finance Authority is scheduled to consider the inducement proposal Thursday. If the board OKs the proposal, it would need a final vote to approve the bond financing.

Lalani has been an active participant in attempting to bring more new housing into dated sections of Downtown Atlanta. He is pursuing the conversion of 20 floors of the 30-story office tower at 34 Peachtree St. into residential. He bought that building, known as One Park Tower, for $12.8 in 2021.