In March 2001, officials from the South Korean city of Incheon choppered John Hynes over a patch of ocean 40 miles south of Seoul and adjacent to the world’s third busiest airport, Incheon International. Their idea: to create a city capable of attracting international businesses, residents, and money—and to build it from the ground up. Literally. Step one would be to reclaim 1,500 acres of land from the sea.

For weeks before, the officials had been contacting American developers, asking if they would be interested in the project. Most said no, calling it a pipe dream. Then they reached Hynes, C.E.O. of New York-based Gale International.

Gale hadn’t been known as an international firm, nor had it ever built in Asia. Its portfolio contained suburban office parks. Before his trip to Korea, Hynes didn’t even have a passport. But once there, he decided that the airport-adjacent location the Incheon officials proposed for the new city had potential. He also found the idea of blank-canvas city building alluring. He called Stan Gale, the chairman of Gale International, from his hotel room in Seoul. “Stan, get your ass over here,” he told him. “These guys are serious.”

Six years and $25 billion later, ground has been broken on a convention center and trade tower in New Songdo City—a name coined by city officials and Gale. The city’s first apartment complex, First World Towers, presold all 2,500 of its units in a day, with buyers from the Seoul area writing checks on the spot for up to $3 million.

Perhaps more significantly, Hynes and Gale have assembled an A-list of cultural partners, from researchers at Harvard University to Jack Nicklaus, to help them create an upscale utopia from scratch. “This is a green city, an English-speaking city where you can walk to work and your kids can walk to school,” Hynes says. “You can drive to the golf course in 10 minutes from your house or your office. How many cities in the world have that?”

It’s true that few places have such a roster of best-in-class partnerships. But will a top-tier prep school, high-end retailers, and green technology be enough to prompt well-heeled internationals to replant themselves 25 miles from Korea’s demilitarized zone?

Morgan Stanley, the project’s lead foreign investor, has committed more than $350 million to Songdo’s construction and plans to pledge more, according to Chris Niehaus, vice president at Morgan Stanley Real Estate in New York. Morgan Stanley and Gale International have had a long-standing relationship, and Morgan Stanley’s endorsement helped hook marquee names for Songdo’s quality-of-life projects. The city’s lead architects are from Kohn Pedersen Fox, a firm whose portfolio includes the World Bank headquarters in Washington and the Philadelphia International Airport. Harvard Advisory Group will plan the curriculum for Songdo International School; Boston’s Milton Academy will be a sister institution. Renowned architect Daniel Libeskind and retail giant Taubman are collaborating on the design of Songdo’s shopping districts. Jack Nicklaus is designing a golf course and villa community, LG is mapping a citywide broadband network, and New York’s Columbia-Presbyterian is overseeing the city hospital. Christie Todd Whitman, a former E.P.A. administrator, will advise on environmental issues. Three former U.S. ambassadors to Korea sit on the project’s advisory board. Except for the ambassadors, all the quality-of-life partners will have an ownership stake in their respective institutions.

But as Songdo tries to attract investment money that might otherwise go to hot spots like Dubai, Shanghai, and Singapore, it seems to be having a bit of an identity crisis. The city’s official language will be English. Gale has set aside a number of apartments to offer to foreign dignitaries. Songdo’s sales brochures feature photographs of happy Western families and Neiman Marcus storefronts. Yet Hynes acknowledges that because of Seoul’s population density, Songdo will be “90 percent Korean at the end of the day.” In its quest for international attention, Gale may alienate some potential occupants from the local area. Korean bloggers worry that Songdo will fail to accommodate the working class; one jokes that “anybody caught speaking Korean there will be fined $10 per violation.”

There are other potential challenges. Though a U.S.-South Korea trade agreement awaits ratification, economic relations between the two countries have been tenuous in recent years. In 2006, net foreign direct investment in South Korea through the end of the third quarter fell to $790 million from $3.4 billion the year before.

Since Seoul is badly overcrowded, investors see Songdo’s residential real estate as a no-brainer venture. But because no one knows whether Songdo will be a viable business hub, many have been loath to take a risk on office space. Jonathan Thorpe, executive vice president of finance for Gale, says the company has been “sweetening the pot” by packaging residential investment opportunities with commercial ones. Locking up funding for commercial investments is crucial to Songdo’s endgame. Gale is striving to make Songdo a great place to live, but Incheon officials didn’t bring the company here to build a city to house Seoul’s runoff. Their priority is convincing Fortune 500 companies to relocate their Asia branches to Songdo. “The local authorities are hell-bent on more and more commercial components and are risking oversupply,” says Steven Craig, a research head in Jones Lang LaSalle’s Seoul office who has advised on several Songdo projects.

Another problem, of course, is the prospect of living next door to a country in President Bush’s “axis of evil.” While South Koreans are blasé about living and working in the shadow of Pyongyang, Westerners may be less comfortable—and with good reason, says Michael Green, an associate professor at Georgetown University who served as senior adviser to the Bush administration on Asia. “For South Koreans, the idea of being close to North Korea is less of a psychological jump because they’ve changed their attitudes—the attitude is that war is unthinkable,” he says. “But that is based on their changing attitudes, not changing behavior from North Korea. North Korea has 11,000 artillery tubes and rockets aimed at South Korea. This is not exactly Cancun.”

Regardless, Songdo is forging ahead. Its first residents move in next year, and at least $1 billion worth of construction will rise every six months until the city is completed in 2014. “This is something we’re going to be working on for years,” says Jamie von Klemperer, a principal with Kohn Pedersen Fox. “It’s a bit daunting. It’s a good part of your life, and somebody else’s life, and somebody else’s life—the team has become an army. In the beginning, you feel like an author, but very soon you feel like one word in the book.” How the book will end is the $25 billion question.