I see NO reason to paint it black, and we aren't seeing the rest of the room. We don't even know if that is the best spot for the tv : ) I'd change the fire surround, before I worried on the tv niche

IMO not enough info and usually in a town home complex anything that changes the esterior is not allowed so removing the FP will need premission . Post pics of the whole space here in comments if you really want help.

She wasn't asking as to an exterior change, she is asking as to a backdrop for the flat scree tv. and it doesn't need a "back drop" .......

Mount the tv, no cords or wires in view, and don't add clutter around the tv, or on the ledge.

Add pictures the WHOLE condo space and all angles. The niche is but one part of a whole.

Sorry for my photos. I can take better ones but this is the space with the kitchen in back left corner.

No, I would not paint it black. Just put the TV there and ^^implement strict clutter control.

Also, I see no problem with removing the fireplace and opening up the entire niche. This doesn't appear to be a woodburing FP (no chimney?) Probably either gas or electric with, at most, and exterior vent if it is gas. Which can be blocked off and left in place.

Only potential problem will be the flooring, lack of, after opening up the nice. Low built-in, perhaps? Rob matching flooring from a closet?

Here is how to post a Design Dilemma to get the best results. You need to show the whole space—all four sides of an entire space—even if it’s about one specific Dilemma.

https://www.houzz.com/discussions/6417709/unofficial-design-dilemma-boot-camp

Keep in mind that you're inviting some design pros and people with a design eye into your home via photos. If they walked into your actual space, they would take in all of it: all four sides, doorways, floors, windows, ceiling, built-in fixtures, lighting, trim--the "givens"--then the features that can be changed--furnishings, paint, art, rugs, decor items, etc. It's all one first impression. Same thing with photos. That's why it's important to provide well lit photos of the entire space, taken from all sides of a room regardless of the size of your problem.

I totally missed that you are installing new flooring.

...until I can look into removing that entire area and fireplace and replacing it with a built in.

Now is the time to remove it. While you are painting & installing flooring. Add the built in later if it is too much to take on now.

No, OP already changed the floors. First line of the post:

"I just moved into a townhome and had the floors done and the interior painted gray. "

I hope she bought extra boxes of that floor model/dye lot, if she plans on remodeling the fireplace niche at some point.