Tornadic events in urban areas are a serious socio-economic threat. The central business district tends to be densely populated and the centralized region for business and entertainment activities. As such, the potential economic and human losses are greatly increased by tornadic activity in an urban center. On the evening of 14 March 2008, the central business district of Atlanta, Georgia experienced an EF-2 tornado. This tornado came with very little warning. The tornado occurred during an exceptional drought with spotty rain showers a few days prior to the severe thunderstorms. We report on an observational and modeling study underway jointly between Purdue, Univ of Georgia and the NASA Terrestrial Hydrological Program that seeks to understand the potential role drought, soil moisture gradients (due to rain showers), and the urban area may have played in causing the thunderstorm/ squall line to intensify over the central business district. Results of our ongoing and recent work with the RAMS and the WRF modeling system, and TRMM, MODIS, and AMSR-E satellite products to assess the role of urban landscapes, and urban – rural heterogeneities on thunderstorm intensification will be initially reviewed. This will be followed by discussion on the experimental design and initial results from the coupled modeling studies that consider combination of model runs: (i) control with climatological surface conditions; (ii) runs with drought; (iii) runs with drought and soil moisture gradients; and (iv) runs with explicit urban energy balance. The role of the different models and satellite data sets in understanding the role of surface conditions on the thunderstorm intensification and tornado formation will be discussed.