After Tony Ressler left a meeting about a decade ago to complete his $730 million acquisition of the Atlanta Hawks, he saw a vast subterranean expanse near the CNN Center known as the Gulch.

“What is that?” he asked the team’s chief executive, Steve Koonin.

The Gulch, Mr. Koonin explained, was the original center of Atlanta that was first named Terminus because it was the end of the rail line for Western and Atlantic Railroad trains. As America’s love affair with cars took off, parking lots were constructed in the Gulch and roads were built above and around it.

As the city grew, the Gulch remained an enormous, underused crater. Over the years, a lack of funding, technology and a complicated ownership had prevented it from becoming something better. Mercedes-Benz Stadium, home of the Atlanta Falcons, and State Farm Arena, home of the Hawks, were built on its perimeter.

When Mr. Ressler saw the Gulch, though, “he got a twinkle in his eye,” Mr. Koonin recalled, who said Mr. Ressler then said “We’re going to do something with that.” Mr. Koonin was skeptical.

But two weeks later, Mr. Koonin got a call from Mr. Ressler’s brother, Richard Ressler, a founder of the real estate group CIM, about developing the land. CIM would go on to strike a deal with the city and state for up to $1.8 billion in sales and real estate tax incentives over 30 years in return for building infrastructure like sewer and power lines. Investors in the 50-acre mega-project, estimated to be worth $5 billion, include Tony Ressler, Arthur Blank, the Falcons owner, and a number of other big names from Atlanta. The development will include more than 2,000 apartments, 1,800 hotel rooms, 900,000 square feet of retail space and a 5,300-seat music venue that Live Nation has committed to leasing when it opens in 2027.