I wonder if the stucco can be smoothed over with plaster. Ask a contractor.

If the textured stucco is everywhere, I would suggest embracing it and heading in an updated Mediterranean direction for your decor that would suit your iron railing and curved staircase. It this were my home, I would remove the blue tile and install a limestone fireplace similar to the one pictured.

We ended taking down the sheetrock and putting new up to get rid of the texturing but I think I would try painting the fireplace blue as suggested above. It is quite a job to remove the texturing.

I think you may be able to have a skim coat trowelled over the existing texture to remove it instead of sanding it. I often prefer a nice white (off white) color for a plaster surface like this.

Play with the paint ideas above. You can still tear it out later if you don't like the "cheap 'n' easy" solution of paint. I think the blue will make a fantastic focal point to kick off a fab Mediterranean home.
Not sure what you're talking about regarding the back of the FP. Can you take a better pic of it?

I can't believe I am saying this…but, I like it. It's different enough to work around it. I think this picture may inspire. White, creams, and the blue accents work well in this room.

What I don't like is the wall paint, the fireplace doors and those sconces. All easily changed. How about a favorite artist, in blue tones, hanging there and maybe long torchieres on either side?

I agree with the suggestions to make small changes. I also think the tile is great. I agree the stucco color is bad, and the screen has to go! Toscanovilla gave some great decorating ideas. My biggest issue is a scale problem. The plaster area is too wide and tall for the height and width of that FP and tile surround. I'd like to see a rustic, wood mantle. Make a "sample" mantle out of cardboard, and play with the length and thickness. The space can also handle much larger scones. Both will help with your scale.

The color is one of the main problems, I agree. The same color is on the walls, ceiling and fireplace. The texturing of the stucco is very thick and unattractive, thicker than the texturing on the exterior of the house. I considered skim coating it and researched that. It may work but it would be more than a "skim," probably an inch thick. Will that work?
The fireplace is about nine feet across and eleven or so feet at the peak, so the two suggestions just don't work. It's enormous. I did consider using a facing of rock or tile under a portion of the mantel to bring the scale down. The other problem is the curve of it. You can see the hearth curves, and on the back the wood comes together in a chevron pattern at the slight angle in the middle. (See the back in the second photo, sorry that's all I have right now.)
What color blue are you suggesting? I love color but I cannot see a giant blue fireplace in my mind.

Kaplan Arch: Is this the product you were thinking of?
SkimKote is a polymer-modified cement basecoat and surface leveler.

Uses: SkimKote is a high-build cementatious coating for direct application over EPS, stucco, gypsum sheathing, CMU, AAC, Rastra and approved ICF systems. SkimKote may also be used as a leveling coat over prepared painted stucco or masonry.

I am with you Lise, the tile has to go, the arch is just weird and seems the wrong scale for an eleven foot high area. I love the idea of a stone hearth, though the limestone Michigammemom suggested is nice too.

Hi lisemcc, I was using the term skim coat somewhat generically. That may be the correct product to use. Maybe some our builder community can chime in as to whether that is the correct product to use...

I would keep the stucco, but paint it a lighter color, such as white. Then, install a reclaimed wooden mantel, and keep the tile! I think that the fireplace has great bones. No use sanding the fireplace if the rest of the house is stucco...Embrace it!:)

This is the only interior stucco feature. The rest of the stucco is exterior. The previous owners took care of the popcorn ceilings... whew. Oh the eighties.

I suggest removal / smooth over the interior stucco

What if you gave it a Venetian Plaster treatment? It could go right over the rough stucco, eliminating the need to sand/remove. And it comes in many colors: [houzz=] The tiles can be sanded and repainted to match the plaster.

I like that Venetian plaster, Bobbi. Will look into that option. Thanks, everyone! I think the first step is to take the arch off and see what's behind it. If it's just rock board maybe the sledge hammer is in order!

Ooooh, demo! Love it!

I have had to work over some pretty awful stucco jobs and the solution I would also recommend is the Venetian plaster. Most plasters will have to be so thick to cover you stand a chance of cracking. The Venetian plaster is a bit more pliable. Do yourself a big favor though. Make sure the person applying this had enough experience with the product.

I would try just painting the area under the arch black/charcoal grey, antiquing or spraypainting the gold trim with fireproof paint and painting the stucco first. Then add a rustic wood mantel and move the sconces The other options can be bery messy and expensive.

Even if you redo, I would consider salvaging the tile and keeping the hearth. Details like this make a house special with a little imagination. Look how much better it looks with just a simple color change!

Thank you, roomscapes, for your advice and experience! And everyone else as well.

Whenever there's a fireplace with a door beside it, it will never look right, no matter what you do or spend. I suggest - close it up, then build a stacked stone wall in front of it and a hearth. Put in a good quality wood stove (casr iron) with a stove pipe. it will give you much more heat than a fireplace would, and will look great. The doo way will then not matter.

Thanks, nevadan. There are passageways on both sides of the fireplace that lead to the front hall.