Mussolini slept here: Hotel legend Bob Burns was rich unemployed, so he returned to the hospitality business--this time for fun. (Disposable Income).

The good news is you're rich," Bob Bums' wife told him just after Burns sold his 65 percent stake in Regent International Hotels for around $300 million back in 1992. "The bad news is, you're unemployed." Bums was 63 at the time, and while his was not the worst problem to have, it did pose something of a dilemma.

"What are you gonna do with the rest of your life--play--golf and tennis?" asks hotel magnate Burns, a tanned, white-maned guy who looks as if he's spent the past 10 years doing both. "I can't do that. I sit on the boards of ING Baring and PruBache with guys like me who do business around the world. This is what we do."

So Burns went back into the hotel business, which is pretty much what he had been doing since he spent a summer working sheets and towels at the old Essex & Sussex Hotel in Spring Lake, N.J., at age 14. The result is the Grand Hotel a Villa Feltrinelli, an historic estate Bums restored as a labor of love on the shores of Italy's clear Lake Garda, two-hours east of Milan.

"A hotel is like a painting," says Burns, standing on the villa's terrace beside a towering 300-year-old magnolia tree and gazing at Mount Baldo looming over the lake from the far shore. "When you get it right, you stand back and say, Ooo! That works!' The money tree isn't what you're looking for anymore."

Burns is 73 now, recently remarried with a two-and-a-half-year-old son, his first child. His wife and son live mostly in New York in an ample Fifth Avenue apartment once occupied by the legendary financier Bernard Baruch.

You sense that Burns is not completely at ease in Europe--Asia's been his backyard and passion for decades. He's still a resident of Hong Kong and an Irish citizen. Years spent revamping and building hotels in Hawaii and New York have given him a permanent American accent. He still laces those lilting Italian names with a hard American "g," and he tried to wow the commie town council with his global triumphs when seeking their approval. Fortunately, his translator took the liberty of turning Burns' chest-thumping into a promise to open up the place for free parties; world-beating cuts no ice around the lake. "Hey, whatever it takes," says Burns good-naturedly, throwing up his hands.

But if he's not completely at ease, he does appear pleased as we stroll past the Villa's limonaia--the old stone pillars sheltering the groves of lemon trees that once produced the region's cash crop. We amble over to Burns' quarters in what was once a boathouse for loading fish caught in the lake. The place is swanky but low-key and warm-self-assured, much like Burns himself. He looks out the French doors. "Like a friend of mine used to say, 'There's a duck on every rock."'

The whole thing started as a kind of happy accident. Burns was staying with his old friend Jean-Marc Ducret in nearby Lake Camo about eight years ago. Ducret's grandfather had come down from France to get into the silk business and ended up buying the sublime Villa D'Este hotel on the island of Bellagio.

"Jean-Marc said, 'Why don't you be my partner, and why don't you buy my house in Bellagio?"' remembers Burns, who didn't want a new business relationship but was interested in Ducret's house. "I kissed him on both cheeks and said, 'No thanks, I've had enough partners in my life,' and then I lost the bid on his house."

Italy's lake country has attracted big money ever since the Romans colonized it a century before Christ and enjoyed the spectacular views from the villas they built on its banks. It's not hard to see why they came. Glaciers plowed through the region as recently as 15,000 years ago in some places, carving troughs between the slopes of the surrounding mountains. The vegetation is rich and wildly varied. Laurel and lemon, olive and oak, cypress and palm trees make unlikely neighbors in the region's mild, dry climate.

"One of the most beautiful places on earth," is how D.H. Lawrence described the town of Gargnano on the shores of Lake Garda, which, as it happens, is exactly where Bob Burns was house-hunting after he lost the bid on Ducret's Bellagia place.

"I was really looking for a nice home when the broker showed me the Feltrinelli place, but the more I looked at it, the more it looked like a hotel," remembers Burns. "I did 36 hotel projects when I formed my own company, which means I probably looked closely at 100 or so. You get a pretty good feel for what's going to work."

The place Burns was looking at was, frankly, a dump, but it was a dump with great bloodlines. The villa was built in 1892 by Faustino Feltrinelli, who made sure that no visitor left the ornate, Italian gothic palazzo unaware that the family owed its fortune to lumber. There's almost no marble, but everywhere you look, there's deep coffered wood ceilings, paneled walls and marble painting on wood.

"Mr. Feltrinelli was a very rich guy, so even though the rooms were derelict, they were good," says Burns. "It's not just a rabbit-warren like so many of these European places."

Feltrinelli also bought eight acres on the deepest part of the lake--over 1,000 feet deep--just across from Mount Baldo. And when Mussolini finally got around to puffing a decent road up the shore, the Feltrinellis paid him to have it moved further up the hill so they wouldn't be disturbed by traffic, leaving them on what is sentially a dead end.

Oh yes, Mussolini. That's a photograph in the villa's foyer of him in his familiar Duce cap, riding a bicycle up that dead-end road. Villa Feltrinelli is where Il Duce spent his last miserable days as head of the surreal Republic of Salo--a town just down the road. In reality, he was a virtual prisoner of the Nazis, the villa's other tenants.

There wasn't much for the Duce to do, so he conferred meaninglessly with his 13 loyal ministers--all of whom were executed a short time later--and visited his mistress Clara Petacci in a nearby villa. Meanwhile, the Wehrmacht manned an anti-aircraft gun on the roof and bunked down in the basement.

They also built a 2,000-square-foot bunker deep in the hillside out back--just one of the little details Burns registered when he sized up the ramshackle villa and its overgrown grounds. The bunker is where the hotel's extensive electrical system is housed.

By the time Burns came across it in 1997, the Feltrinelli place was listed at around $3.6 million and belonged to a local contractor named Pasquale Regalini.

"He said, 'Now we talk about the price,'" Burns recalls. "I said, 'What's to talk about? Here's a check.' I said to myself, "This is going to be fun.' For the first time in my life I don't have anyone looking over my shoulder. There's no budget!"

At first blush, that sounds a bit funny. As CEO at Regent, Burns didn't exactly have his hands tied when he developed such opulent properties as the Regent Hong Kong and what is now Four Seasons on East 57th Street in New York. This, after all, is the guy whose little extras, like marble bathrooms, raised the budget for the Regent Hong Kong from $100 million to $360 million before it opened in 1980.

But someone's always counting pennies, even in the penthouse suite. The grim logic of hotel arithmetic holds you to a per-room construction budget roughly 1,000 times the nightly rate, figuring an average 75 percent occupancy. So for a fancy hotel that charges, say, $400 a night, you don't want to spend more than $400,000 per room.

That's a lot of money, but still not enough to fill a hotel with those massive nickel-plated Lefroy Brooks shower heads in the $20,000-a-pop shower stalls Burns found in California. "You've got a partner, and that partner says, 'Whoa, too expensive if you multiply that by 400 rooms.' But you can do that with 21 rooms.

Which helps explain the bathtubs. "It took me two years to find the ones I wanted--double ended with the drain in the middle and four coats of porcelain, nothing acrylic," says Burns. "I found them outside Paris. They're so heavy you need special steel bedding to reinforce the floor underneath."

Now that the Grand Hotel a Villa Feltrinelli is up and running--it opened last fall--the fun part is mostly over for Burns. "I knew a guy with a beautiful hotel in Ravello who used to love to take the luncheon orders even though he was the richest guy in town. That's not me--I don't want to be the maitre d.'"

Which means that Bob Burns has the same old problem again. He could teach; the hotel school at Cornell University has been after him for a while. He says he likes students, but he generally can't stand professors. On the other hand, there's a run-down old place in Hanoi, the Metropole. Burns loves Hanoi, and he tried some time ago to buy the elegant French colonial hotel. "But it was somebody else's rice bowl, so I walked away. Now," he says with a glint in his eye, "she's gone..."