Translation:How does he want to build this place?
WRONG! "How do you want to build this place?" is also acceptable. In Italian, referring to the third person is a formal way of saying "you".
It's accepting it now (27 feb 14) which was kinda lucky as I put the third person only by mistake/brain ache :)
It seems that Duolingo hasn't put the formal 'you' as an acceptable translation to most sentences. Hopefully after it teaches the formal 'you' it will then accept those translations, but I haven't got that far yet.
This English sounds very strange to me. You don't build a "place"--you build a THING (building, statue, monument, etc) possibly in or on a place. Does this mean "How does he want to develop this place?" or maybe "what does he want to build on/in/at this place?"?