(FORTUNE Magazine) – It's a brilliant blue September afternoon. Paul Fireman is standing on the final tee of the soon-to-open Liberty National Golf Club in New Jersey. The hole is a 480-yard par-4. Dead ahead is the Manhattan skyline--the Statue of Liberty and the old immigration clearing-house on Ellis Island off to the left, and the Verrazano Narrows Bridge reaching over the upper New York Bay behind. Fireman has already played this hole dozens of times in his mind and knows that he needs to aim his shot to the right and allow the breeze to move the ball toward the center because anything too far right is dead in New York Harbor and too far left is in the deep fescue. A satisfied smile plays on his lips. "None of this can be replicated," he says.

And that's the point. The CEO of Reebok has spent seven years and $130 million turning this unlikely slab of Jersey City industrial blight into a golf course that could rival Augusta or Pebble Beach as one of the nation's finest. It's already made the record books as the most expensive course ever built, and Fireman hopes it will eventually be selected to host a U.S. Open or PGA Championship--making it one of an elite handful of New York--area clubs like Baltusrol and Winged Foot to share that honor. "I can just imagine the best players in the world coming here," he says. "When people see this place on TV they will not believe it is real."

That Liberty National is real is almost as remarkable as its pricetag. In the mid-1990s, as the regeneration of the Jersey City waterfront was just getting underway, this spot was a wasteland, studded with huge oil containers and acre upon acre of toxic waste. For a time it was used as an ammunition dump. It took Fireman just five minutes to decide he had to have all 160 acres when he first saw it in 1998, but years more to clear the environmental hurdles and ensure that the only hazards on the golf course would be water and sand. To turn his dream into reality, he retained renowned golf course designers Bob Cupp and former U.S. Open champ Tom Kite. (They've teamed up on some of the most prized layouts in the country, including Eagle Ridge in North Carolina and the Legends Club in Tennessee.) The finished course, which is scheduled to open next July 4 and will cost $500,000 to join, will be accessible by car, helicopter, and yacht (the crossing from lower Manhattan takes about 15 minutes). Soon after, work will begin on a clubhouse designed to echo Sydney's waterfront Opera House.

But this isn't just another tale about a billionaire's vanity. Fireman, 61, has neither the exaggerated ego of Donald Trump nor the flash of Steve Wynn. He seems more like the college dropout from working-class Brockton, Mass., who realizes how lucky he has been. There's no doubt Fireman dreams big, and there's no mistaking his wealth. In August he agreed to sell Reebok to Adidas-Salomon for $3.8 billion. (When the deal closes, Fireman and his wife, Phyllis, will gross a cool $800 million.) Still, Fireman was always driven more by a desire to create businesses than by any great love of sitting astride his creations. Even as he made his fortune selling sneakers, he would periodically step aside as CEO to start other ventures. Now Fireman is harnessing that drive in service of his life's passion: golf. (He plays off a 6.4 handicap.) Without that determination, it is doubtful that Liberty National would have been built. As Bob Kraft, owner of the New England Patriots and a close friend, puts it, "Paul is the quintessential hometown boy who made good. Liberty National is his chance to leave something behind that people will appreciate."

The story of Liberty National Golf Club really begins nearly 20 years ago on Cape Cod. At that point Fireman had already made it big. He had been casting around for something to do after the family's small sporting-goods distribution business faltered when he famously invested $35,000 in 1979 for the North American rights to sell sneakers made by a little-known British company. The Firemans mortgaged their house, Phyllis took a job selling encyclopedias to make ends meet, and he got to work developing marketing strategies and recruiting athletes for product endorsements. By the early 1980s Reebok had its first mega-hit with its aerobics sneaker. Fireman bought out Reebok's British owners and took it public in 1985.

Around this time, he and Phyllis decided to buy a house on Cape Cod, not far from Hyannis. Their new home was located just a par-3 or so from the stately gates of Oyster Harbors, a private club designed by Donald Ross in the 1920s. Fireman jumped when a friend suggested he join. He sent off the paperwork and waited. Months passed, but no response. Eventually word trickled back--nothing official, mind you--that Fireman wasn't welcome. Some stories suggest that Fireman never seriously pushed his case; others that Fireman's high profile was a concern. A more controversial account: Fireman was blackballed because he is Jewish. (Oyster had no Jewish members at the time.) That's certainly the version Fireman subscribes to. He told the Boston Globe in 1994, "It's a fully restricted club," adding, "If it walks like a duck and quacks like a duck, chances are it is a duck." (Oyster Harbors did not return calls seeking comment.)

Today Fireman is reluctant to discuss the episode. "I don't want to talk about that club," Fireman says, refusing to say the name Oyster Harbors. He does add this much. "I hate blackballing," he says. "It is an ignorant practice from an old era."

Fireman insists the slight didn't bother him, but what he did next belies his professed equanimity. Fireman learned that a semiprivate club less than ten miles from Oyster Harbors was in bankruptcy. He paid $9 million at auction to buy it; poured millions of dollars into redesigning the course, landscaping flats into hills terrain, adding flower beds and cranberry bogs; and christened it Willowbend Golf Club. When he opened it in 1992, complete with a Cape clubhouse and residential lots, Fireman dispensed with a membership committee. Willowbend had but one man screening new members--Fireman. He assembled a membership that included Jews, blacks, Asians, and women. His newfound passion for equality didn't extend across the wealth divide--Willowbend costs $150,000 to join--but he did invite former members to stay. And Fireman made sure every membership decision was transparent.

Fireman, meanwhile, was growing restless with corporate life. Never comfortable as a manager, Fireman preferred to create new ventures. After Willowbend he began to explore options for developing other courses and went on to open nine more over the following decade, including the Westin Rio Mar Beach Resort and Country Club, the Costa Caribe Golf and Country Club, and the Coco Beach Golf and Country Club--all in Puerto Rico--along with the Ranch Golf Club in Massachusetts and the Starr Pass Golf Club in Arizona. Altogether his courses are worth $2 billion.

But they were a mere prelude to what came next. In 1998, Roland Bates, one of his top real estate executives, suggested that the two of them ride out to New Jersey to take a look at the site that was to become Liberty National. Its then-owners had attempted to build a golf course on the land and even hired Kite and Cupp, but the effort had failed. Bates believed Fireman had the money, and more important, the determination to pull it off. He recalls that Fireman walked around a little, gazed at the Statue of Liberty and the Manhattan skyline, returned to the car, and said, "Do the deal." Says Bates: "Paul is one of those people who can seize an opportunity when all everyone else sees is risk, and turn that into a vision."

Doing the deal was a little more complex. First Bates had to negotiate buying the 160 acres (and 4,000 feet of waterfront) from several owners and maneuver through a complex bureaucratic maze that ran from the New Jersey Department of Environmental Protection to the Army Corps of Engineers. That took three years. In 2001, with the oil companies still providing some funding and services for environmental rehab, Fireman and his crews began moving in two million cubic feet of soil and sand to create a protective cap, raising the elevation by as much as 50 feet. Some of the contaminated soil itself was actually shipped to a firm in the nearby town of Carteret, where it was treated and placed back. The project required the installation of subterranean mechanical devices that continue to test the ground water.

Last summer Cupp and Kite were ready to begin. They laid out the holes and focused on turning a barren site into one that would look lush with trees and a variety of grasses. They planted more than 500 full-grown trees including willows, honey locusts, pin oaks, golden maples, and flowering pears. To ensure that the grounds do not become dried out in the summer, they installed more than 5,200 sprinkler heads--double the standard number--and built five irrigation lakes. They also added special climate-control systems beneath each green. The greens themselves were planted with a hybrid grass developed for Augusta National, while fairways were planted with a type of bent grass more typically found on putting surfaces. The project required so much engineering that Cupp recalls one occasion when he and Kite decided they needed to move the location of a green to improve the view. That alone required meetings with environmental officials and a lengthy reckoning of soil conditions. "It was one green that we wanted to move 50 feet, and it took 20 times longer to do it than I'd normally expect," says Cupp.

The result: a spectacular links-style course running 7,400 yards, with many of the holes bordered by water. Cupp calls Liberty National a "career-defining project." The course begins with a majestic elevated 414-yard par-4 with a Scottish-style burn running along the tight fairway that looks directly toward the Verrazano and gives players an early peak at the entire course. It reaches its crescendo on the last tee, the 480-yard par-4 so beloved by Fireman. "If you aren't amazed after all that," says Cupp, "you need to go to the clubhouse bar and spend the rest of the day drinking."

Will all this make Liberty National one of the nation's best golf clubs? In both design and location, Kite and Cupp seem to have accomplished just that. But though it is one of the world's most expensive courses to join, Liberty National is hardly a private oasis. Anyone visiting the Statue of Liberty can peer over and watch golfers coming down the fairways or eating on the clubhouse veranda. And then there is the fact that while Liberty has a view to die for, the west side of the course abuts industrial desolation. Eventually much of this will be blocked from view by three apartment towers that Fireman plans to add, together with some creative landscaping. But those who arrive at the course by car will see exactly what Liberty National used to look like. This, of course, would not be the first exclusive golf club in an urban setting--Scotland's St. Andrews is a prime example. But St. Andrews doesn't cost $500,000 to join.

Fireman insists he doesn't just want Wall Street tycoons who can afford the entrance price. He's already recruited former New York City mayor Rudy Giuliani and his friend Kraft as charter members and hopes to bring in a variety of prominent players in entertainment, sports, and industry. Fireman also plans to continue the membership policy he began at Willowbend. He insists that Liberty National will have no closed-door committees.

Walking the course with Fireman, one quickly senses that Liberty National is more than an astute business deal. True, he stands to make millions--not from the course but from those three apartment towers. But there's something he says, exiting the 14th green and glancing over at the Statue of Liberty and Ellis Island, that provides a better clue to what Liberty represents for him. "It's incredible to think," says Fireman, "that my grandparents came through here and the first thing they saw was this land. And today I am building this golf course. That's the American dream."

CUPP'S PRIDE

Bob Cupp and Tom Kite designed Liberty National with Scottish links in mind. Some of Cupp's favorite holes:

HOLE 1: "Behind you is the city skyline and to your left is the Statue, and straight ahead is the Verrazano. At a 40-foot elevation, the view is striking and will place a memory in everybody's brain."

HOLE 18: "You are hitting it right at the city, and there is water up the right. You need to hit a driver and need to hit it strong enough, because the second shot is enough uphill to give you a battle."

HOLE 17: "You feel as if the Statue is walking along in the rough. You see her feet and not the pedestal."

HOLE 3: "This is one of my favorites. The fairway was completely Tom's work, and the green was completely mine. There is a target bunker that screams 'This is the line' and there is a series of large bunkers. If you drive the ball toward the bunker, you will have the prettiest 100-yard flip to the tiniest green. But you better get it on the dance floor. If you hit it left, the ball will roll into a grass hollow from where you'll not be able to see the green."

HOLE 14: "There's a sucker pin on the back right. Being on the back nine, there will be a certain amount of desperation or courage to go at that pin. It is as intimidating as any shot on the course, and the penalties are severe."

HOLE 11: "This will be a pivotal hole. It has a left-to-right wind and all sorts of funky stuff to the right of the green. The length of the hole will also cost players some shots."