I would convert it to gas, then remove the vertical element on the right. Budget permitting, I would get rid of all of the brick and go with something that works with your aesthetic, either tile or solid surround.

Fireplaces have this illusion of cozy, romantic, complete in a home. Practically not so much. If you use them they are messy, sooty winters, in summers heat and humidity they put off an aroma of ash. We could also discuss the 20+ bats that were living inside ours and found their way into the house..... In practical applications I am all for gas. To retro fit is not all that huge a deal, they pop a liner in the existing chimney, run a gas line and you have it. Easy on, easy off when you want them. The truth that you haven't ever used it and doesn't sound like you ever 'if only it were gas' dreamed of lighting it so why would you go to that expense? Future buyers might unearth and use, the fact that that is a possibility should play well if that is really a need for any future buyers. Put the money into making that room what works for you not updating and element you never use.

I need to see the whole space to even begin to comment. Is that brick tower on the right hiding the chimney ?

@Patricia Colwell Consulting thee brick tower on the right is just decorative.

Here are two more photos showing the full space. On the opposite end of the room where the plant is located is where we plan to move our dining table. If we keep the fireplace we will keep the same orientation of sofa and TV. But if we were to wall off the fireplace, we could reorient and move the TV to where the fireplace is giving us more room between sofa and TV

I’d consider a gas insert. I have one in San Diego and am surprised how often it takes the chill out in the winter without turning on the heat. The corner is awkward, granted. The useless brick tower thing has to go and maybe just Sheetrock the wall area and either tile or solid surround making a proper looking fireplace. Consider the gas insert if it’s in the budget. I really enjoy and use mine.

It is ugly and useless to you. Demo it. Have you considered wiring that pony wall behind the sofa for TV so you can totally reorient the room? This isn't exactly what you have,but you get the idea.

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@decoenthusiaste The idea crossed my mind, but I thought the TV would be too low.

Just for clarification: Gas logs do not require a reline of the chimney and are less than 1/3 the cost of a gas insert. They are also much more realistic and easily installed since they have a burner that sits on the floor of the fireplace and a grate with ceramic logs stacked on it just like real wood, if there is an existing gas line.

A gas insert is a metal box with an integrated burner system. Most inserts are "Direct Vent" and require you run two vent pipes up the chimney. Installation is typically not a DIY job. They are very heat efficient, but the fire is not open to the room and does not look nearly as realistic as the open fire of a gas log.

Most people in California opt for gas logs instead of an insert because they look so much nicer and can be used pretty much year-around.

How much lower than 42" would 1/3 of your screen's height be? I should think it would be negligible, but you might have to get used to it. It would be nice to have that option. Is that wall around a stairwell or what?

@decoenthusiaste yes, a staircase is behind that wall. The wall is ~36 inches high and our current TV is about 31 inches in height. When I'm sitting on the sofa, the entire TV would be below my eyeline.

We are leaning toward walling off the fireplace and putting the TV on that wall.

I would get rid of it ! It serves obviously no purpose but costs a lot to move to a more suitable wall as this wall is a lost space …. You can’t sit around the fireplace , you don’t use it and it’s really ugly to look at .

If walling off, the hearth and pillar would have to be removed and then carpeting will need to be replaced. Decide on your maximim budget, consider your lifestyle and how to create opportune enjoyment of the space. That’s how I’d spend my money.

In order not to have replace carpeting (unless you want to), I’d just add very large art over fireplace and it being querky could be an asset (enjoy it more often by using packaged logs).

Create a more functional and inviting space and take advantage of the long wall: add a floating sectional facing fireplace and TV (imagine below but the wall would be end of room with sliding door and add some plants there. Look for a longer TV base configuration, some art and could layer carpeting with a rug to ground seating area. I really like this room‘s style as well, as it would complement your fireplace and warm tones in general.