MILAN (Reuters) - Optimists might call it Milan's Eiffel Tower moment.
The Universal Expo, which gave Paris its landmark in 1889, is due in Milan in 2015, bringing investment to pep up a sluggish economy as it turns Silvio Berlusconi's buttoned-down hometown into one of Europe's largest building sites.
For many Milanese, it's long overdue: Italy's fashion and business capital is ageing and has long suffered from an image as a gritty city of smog, traffic and grey asphalt pavements.
Hosting the five-yearly Expo is a high-stakes game that can make or damage a city's reputation, and coffers.
Besides Paris, whose skyline earned a global profile with the straddle-footed monument erected for its Exposition Universelle, Seville got an economic boost with Expo in 1992 and Lisbon transformed a derelict industrial site for the 1998 Expo.
However in 2000 Hanover's Expo, billed as the biggest and best world fair ever, drew media ridicule and outraged German taxpayers after running up losses of more than $1 billion.
"I'm truly hoping that this Expo 2015 will give Milan a little bit of an electric shock," said city native Paola Antonelli, a curator at New York's Museum of Modern Art and co-author of a book about the architecture of world fairs.
With cost pressures bound to escalate at a time of economic slowdown -- growth is nearly stagnant and inflation hit a record 3.7 percent in May -- some warn the shock may be financial.
"It is not really clear how much the Expo will cost and what will be Milan's share of the total costs. The experience of other cities shows that almost certainly there will be overruns," said Raffaele Carnevale, an analyst at Fitch Ratings.
Carnevale said Milan's debt was already double its income, but government plans to give local governments greater flexibility in using tax revenues could help by keeping a larger share of Milan's significant wealth in the city.
For Milan, the plan is for a polluted financial centre -- home to the La Scala opera house, a 19th-century shopping arcade and Europe's first seven-star hotel -- to get an urban makeover into something greener and edgier.
Around 20 billion euros ($31 billion) in public and private spending is in prospect to reshape Milan's modest skyline, build parks, improve infrastructure and provide first-rate offices and cheaper housing for young families.
Italy's government will give Milan 575 million euros between 2009 and 2011 to fund investments for the Expo, Milan's mayor Letizia Moratti said last week.
The city, which is home to 1.3 million people, aims to slow its urban sprawl by creating secondary hubs of transport and commerce. It is asking the government for special status to speed Expo projects through the notoriously slow bureaucracy.
"This is an important turning-point that we've been waiting to carry out, including through investment in Expo 2015," said Carlo Masseroli, Milan's urban development chief, adding that Milan is ripe for rejuvenation.
Only one in four Milanese were aged 30 and under in 2006, down from almost a third in 1991, a fall due to a lower birth rate and higher rents that pushed younger couples beyond city limits.
Ranking in the bottom third of European cities for green space per resident, Milan also plans to add 11 million square meters (118 million square ft) of parks and other green spaces.
Not all the building is directly related to the Expo, due to draw around 30 million visitors. Javier Monclus, an architecture professor at Polytechnic University in Barcelona, said Milan's plans are in line with those of other host cities in stressing infrastructure and more green space.
"Everybody thinks of expos ... as a tool for urban transformation, so the strategy is one more instrument for changing the city," said Monclus, who has studied the impact of expositions on cities.
The architectural changes will be Milan's most dramatic since the 1950s, when architect Gio Ponti's sleek Pirelli building took its place as the city's sole skyscraper. At 216 meters (713 feet), it remains Italy's tallest building.
Planned construction includes CityLife -- three striking towers on the site of a former fairground: a twisting column, a skyscraper with drooping upper floors, and a tower taller than the Pirelli building.
Some critics, including Berlusconi, have said the CityLife project by architects Daniel Libeskind, Zaha Hadid and Arata Isozaki is not in keeping with Milan's discreet style of hiding wealth behind heavy doors and barred windows.
But many Milanese see the plan as a needed boost to Italy's industrial heartland and a way to enliven a featureless cityscape.
A 2007 survey of business executives by real estate consultancy Cushman and Wakefield put Milan in 12th place among 33 European cities as a place to locate a business, in part because it is near the centre of the continent.
However, it ranked 24th in value for the money, partly because its office stock is out of date.
"It's a good opportunity for a modern Milan, since Italy is still a little bit behind in things that are modern," said Marco Siciliano, a 16-year-old student, looking at a display of the plans in the Galleria shopping arcade. "Italy is good artistically but it could use a shove to move ahead."
Additional reporting by Valentina Za; Editing by Clar Ni Chonghaile and Sara Ledwith