You need to investigate what is inside of the soffit. It could be that there is mechanical ductwork etc running along there and removing the soffit will create another problem of relocating things. have you any idea about it?

I think it's empty. Maybe some wires but we have forced hot water heat. I have not had it investicated fully because I am still looking for a reasonable contractor. It's more that I'm wondering if I can have a modern kitchen with the soffit staying.

We removed ours and found the sink vent pipe was underneath. We had to have a plumber come in and relocate it. A pain in the butt but the soffit removal was worth it. In our old house we couldn't remove the soffit for very similar reasons. We instead ran a small width molding Laing the top edge of the cabinets themselves. It tricked the eye I to ignoring the ugly soffit above.

Christine,

You should open a few holes on the sides and take a look if anything inside. If you see anything there, pipes, ducts, wires,etc. The holes can be easily patched if you cannot take the soffit out.
If anything runs inside the soffit, and the location is not lower than 6" (if you changing the upper cabinets to a taller size cabinet) from the top... and they don't come out more then 11" from the back wall out, because upper cabinet is 12"...you can easily remove the soffit... Also keep in mind that some things can be re-routed or moved up also... So talk to your contractor and he will advise you what can and cannot be moved.... also check with your local building department if you need a permit if you going to remove the soffit, most places require permit for this type of work.

If you leave existing cabinets, you can order finished material matching your cabinets to build up the top and use crown molding to the ceiling and hide everything that is above.
If you changing your kitchen, you can order uppers 6" taller and do the same, build up and crown to the ceiling.

Who ever installed your soffit, made it to wide (industry standard size is 13" to make it look right) unless it was intentionally done to install lights or there was another reason for it.

If you going to remove it, you can smooth the whole ceiling and repaint or match the textured ceiling over disturbed area and paint the whole ceiling and you will never know the difference.

Good luck

We have the exact same problem - our kitchen has the soffit pictured above. My husband took down one side to his dismay found that a main beam of the house runs through - so now I am looking for ways to conceal it! When we built the house in the late 80's it was the style - plus we paid extra to have the size of the house expanded by 2' on so apparently they still built the house the same as the others in our subdivision but added the 2' after! Ugh. We were going to try crown molding but with the approximate 2' of soffit - it would not look good. Any suggestions?