With the former 1916 Union Assurance Building on Shanghai's historic waterfront, he becomes the first foreigner (he is a United States citizen) to negotiate the purchase of an entire building on The Bund. Though the mainland's policy on land ownership may have been eased, it remains almost impossible under current legislation in high-profile locations. But Mr Lee, an energy sector specialist and partner in the Beijing office of Houston-based law firm Vinson and Elkins, was undeterred.

Having overcome official roadblocks in 1996 to open his successful Courtyard restaurant-cum-art gallery in the grounds of the Forbidden City in Beijing, he knew what perseverance could achieve.

When he moved to Beijing from Washington DC in 1991, Shanghai held little appeal for Mr Lee, who now has homes in both cities.

'I used to hate going there, always dusty, dirty and chaotic,' he admitted. But by 1999 he felt that Shanghai had shrugged off any chips on its shoulder about being second-best to Beijing. 'Shanghai people felt they were back at the top of business and society in modern China,' he said.

So when he first looked over the seven-storey No3, The Bund, Shanghai's first steel-framed building, he was intrigued. 'It was a shell,' said Mr Lee.

At that time The Bund was designated the 'financial Wall Street of China, but it wasn't happening so the government started promoting Pudong as the financial centre instead', he said.

Impressed by the 'amazing building and location', he saw an opportunity to do 'something very different and special. It may sound naive and idealistic but I wanted to do something to help establish standards of culture in Shanghai. I wanted to create something where society could share culture and art.' It was the same concept behind the Courtyard in Beijing, he explained. 'So many young Chinese people have never experienced art for real.'

First he had to convince the Shanghai planners of the wisdom of his Renaissance vision for the building they saw as a potential bank or office.

'We were told The Bund was not zoned for 'entertainment' purposes, so we had to get a variance to do something different,' he said.

'We got tremendous support from the higher levels of government - and tremendous opposition lower down.'

At the time there was confusion about the future of The Bund, and many mid-ranking officials were loath to approve anything that might go against final policy.

Being a business lawyer, he 'set up structures that achieve a business goal', said Mr Lee.

It is not a 50-50 split but Mr Lee and his partners, Grand Tour Tires, a Singapore property developer and tyre maker, are shareholders in the project.

He has put his own money in the project, which had an overall investment of about US$47 million, he said. 'I wish it were less.'

The Shanghai government was firmly behind the project, he said, and a Chinese bank had provided funding, though he would not say which one.

Three on The Bund is set to be Shanghai's hippest and classiest entertainment centre.

It will have China's first Evian Spa, exclusive French and Japanese restaurants, a jazz lounge and private tea salons. The first two floors will house A-list luxury and fashion brands and a Bernardaud Cafe. Mr Lee is overseeing what will be the largest art gallery in Shanghai. He is convinced its central location in the building's atrium is justified by the interest China's nouveaux riches are showing in art.

'We want to show significant contemporary art, and yes, we want to sell it, maybe to bankers, offices and hopefully to collectors so it stays in China,' he said.

Paintings will cost from tens to hundreds of thousands of dollars, he admits, but promises affordable prints. As for the future of Three on The Bund, he has no exit strategy. 'It's a commercial venture, but aside from a financial return it's something we plan to keep and hold for a very long time.'

Investment holding company House of Three, of which Mr Lee is executive chairman, is developer and owner of Three on The Bund.

Established in March 2000, it is incorporated in Hong Kong and is the first privately owned company to obtain approval to develop and own a building on The Bund.

Three on The Bund was the company's first private-equity backed venture in China, Mr Lee said. 'I hope it will be profitable soon. When we achieve a return on our investment is another thing, but we're looking at a five- to seven-year investment horizon before we see a return,' he said.

What next for Mr Lee? He has started on a new project with the same partners, Grand Tour Tires. 'I can't tell you yet what it is, but it's as central and important a location as The Bund, but in Beijing.'