Problem One: Casa Loma is a majestic urban castle, complete with towers, secret passages and a 240-metre tunnel, but it’s also an underused money pit needing $20 million in renovations. The sprawling building is a burden on a cash-strapped city.

Problem Two: Toronto owns 100,000 items of historic and cultural interest — including Stone Age artifacts, War of 1812 memorabilia and objects of everyday use from the Victorian era — but most of this collection languishes in warehouses because there’s no place to display it.

Obvious solution: Turn part of Casa Loma into a museum showcasing Toronto’s history. It would provide a much-needed home for the city’s collection while complementing the existing building, attracting high-profile donors, boosting interest in local history and providing display space for travelling art and historical exhibits.

Two far-sighted Toronto councillors, Josh Matlow and Joe Mihevc, have proposed just such a use for the venerable castle. And city council responded this past week by asking private operators, bidding to run Casa Loma, to consider a museum as part of their mix of operations.

It’s realized that the entire castle can’t just be a museum. That won’t pay the bills. Money-making ventures such as restaurants, retail outlets and perhaps even condos need to be part of the mix. But Matlow and Mihevc note there’s ample space in this vast structure and its outbuildings for a substantial Museum of Toronto, “high-end event space,” and to house artifacts from Sir Henry Pellatt, the visionary but eccentric millionaire who built the place.

It’s unusual for a city the size of Toronto to lack a place to celebrate its past. Montreal and Vancouver boast municipal museums and Chicago is especially blessed with an amazing facility. Its initial local collection was lost in the Great Chicago Fire of 1871, but a new museum arose from the ashes to become a historical centre of national importance with 22 million holdings.

A Toronto museum obviously won’t come close to that. But Chicagoans had a head start, beginning their museum back in 1856.

Better late than never. Casa Loma could provide an ideal space to educate Torontonians about their own history, using a wealth of local artifacts and visiting shows. In the process, a grand old building would be revitalized and given a new 21st-century purpose. We can’t know for certain, but we suspect Sir Henry Pellatt would approve.