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Old City Hall towers over Toronto. The grand sandstone pile stands at the top of the Bay Street canyon, its carvings and gables testifying to Victorian Toronto's ambition and craftsmanship.

It's time to bring that history back to light. In a report being delivered to City Council's Executive Committee on Wednesday, city staff recommend that the building be re-purposed to house – among other things – a new Museum of Toronto.

The idea of a museum is long overdue, and there's no better place to put it: The building is the ideal venue for revealing the stories of Toronto and the ambition that has pushed the city forward.

When architect E.J. Lennox won a design competition for a courthouse and city hall in 1886, he employed the Richardsonian Romanesque style – the choice of prospering metropolises including Pittsburgh and Buffalo. The building opened as Toronto's third city hall in 1899, after plenty of partisan wrangling and cost increases. It was, without question, the grandest building of Toronto's first 100 years.

For now, it's a bit of a mess.

Since the city's government moved to the current City Hall in 1965, the older one has served simply as courts, and half a century's worth of drywall partitions, vomit-brown ceramic tile, and pink linoleum have been added to the place.

But if it's tarnished, it remains a gem. Last week, I took a tour of the building with architect Peter Ortved and facility manager Doug Kozak. After passing through the security screening, we were free to look around the main reception hall: the intricate tile mosaics, the scagliola columns and the dentil mouldings overhead, and in front of us Robert McCausland's stained-glass window, The Union of Commerce and Industry, which shows a history of Toronto's origins, like bearded workers meeting up with well-travelled traders.

None of the cops, citizens or red-sashed judges who walked by us seemed to notice.

"This is an icon," Mr. Ortved said. "It's the premier heritage building that the city owns, and they've never paid much attention to it. It's got a site to die for. And it deserves to be treated better."

Mr. Ortved's firm, CS&P Architects, has been studying Old City Hall along with a platoon of other consultants including museum specialists Lord Cultural Resources. Their recommendation, endorsed by city staff, is to re-purpose the building for a new city museum. This is something Toronto should have had 40 years ago, a huge missing link among its cultural institutions and a needed forum for discussion of the past and present. The consultants also imagine a new branch library, five times the size of the current branch in City Hall; and a variety of other "compatible uses," likely office space.

There's a lot of room. The building, which is a square with a courtyard in the middle, has about 170,000 square feet of occupiable space; thick stone walls and vast corridors make its footprint even larger.

The original courtrooms have been carved up into smaller spaces; yet most of the wainscoting, ceiling mouldings, and ornamented columns remain in place. It's all very fussy – and indeed the Richardsonian style was already out of fashion by 1900 – but you can't deny the lustrous grandeur of these well-proportioned, brightly daylit chambers.

CS&P's vision imagines some of the current courtrooms and corridors used as gallery space. The courtyard would be covered with a glass roof and used for major civic events and rentals. For now, it's where police vehicles come in, through the stone-arched "sally port" to the north. Officers bring their "custodies" into courtrooms and then park their vehicles in the grand central space, lined by Lennox's gorgeous brickwork. This sort of space, at the National Portrait Gallery in Washington or the British Museum in London, has proven to serve wonderfully for public gatherings.

None of these fixes will be cheap. City staff estimate the building will need $190-million in restoration and repair work, regardless of its use. A museum, of course, will need more funding, from public and philanthropic sources. But that's doable. Back in 2015, staff initially recommended the entire building be used for retail – which would be a huge missed opportunity.

"Great buildings symbolize a people's deeds and aspirations," said mayor John Shaw at the building's opening in 1899. "Where no such monuments are to be found, the mental and moral natures of the people have not been among the faculties of the beasts."

Shaw made those statements in a city of grinding poverty and deep inequality; people lived in "slum" conditions in The Ward literally across the street from City Hall. His point remains: Places matter. And the most special places within a city matter deeply, as symbols of who we are and what we choose to do together.

Today's vastly larger and wealthier Toronto should create great and lasting civic works. The City Hall of 1965 embodied that vision. So, perhaps, will the new courthouse that will absorb many of old City Hall's current uses; Infrastructure Ontario announced last week that it's negotiating with a team including Pritzker Prize-winning architects Renzo Piano Building Workshop. With luck, the courthouse will break a recent streak of austerity-minded and unimpressive building projects by the city and the province.

Meanwhile, Old City Hall is waiting to be polished. Mr. Kozak took us up into the attic of the building, where I had never been. A painted sign on a brick wall, likely from the 1920s, guided us "TO THE LABORATORIES." And as Mr. Kozak unlocked the door, we entered a whole labyrinth of grand, decrepit rooms. Amid a scatter of old files and broken furniture, burly wood trusses reached up to support the building's heavy roof; tall gables soared up into the shadows. Arched leaded-glass windows looked out toward the new city hall. There was space, light and atmosphere to spare up there: assets waiting to be discovered, and a past waiting to be examined.

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