Council's executive committee yesterday narrowly endorsed a plan to leave the Kiwanis Club in charge of Casa Loma for another 20 years -- despite an advisory panel's recommendation that the historic castle's operations be overseen by a public trust and be put out for competitive tender.

"Casa Loma has deteriorated into largely a third-class banquet hall," Councillor Howard Moscoe complained. "The Kiwanis proposal might make it a first-class banquet hall, but it lacks the excitement that needs to be injected into what has become a very sad situation."

The Kiwanis Club of Casa Loma has operated the interior of the Edwardian castle near Spadina Road and Dupont Street since 1937; the city, which owns the building, is responsible for its exterior.

Under a long-standing deal that expires on Dec. 31, 2008, Kiwanis pays a portion of the castle's operating revenue to the city, which holds the cash in a trust to cover external repairs.

In 2006, Casa Loma paid the city $923,000.

The Kiwanis Club of Casa Loma's chairman said yesterday it would be manifestly unfair to wrest control from the group after seven decades.

"We're the ones that branded this building," Richard Wozenilek said. "We're the ones that made it the tourist icon. After 70 years of very, very hard work, to now just cast aside that 70-year relationship, that's absurd."

Questions about Casa Loma's future have swirled since 2004, when the city set up an external advisory panel called the Casa Loma Advisory Committee [CLAC] to examine the castle's operations.

Last summer, CLAC delivered a controversial report recommending a public trust -- similar to the not-for-profit trusts that run the Toronto Zoo and Exhibition Place--be set up to oversee the castle's operations.

It suggested a competitive bidding process be established to find a private company or group to run Casa Loma's day-to-day operations.

The report invited the Kiwanis Club to bid.

However, the service club bristled at the report's suggestion it cede control. Marshalling its volunteers, the club last summer convinced a council committee to send the CLAC report back for more study.

Yesterday, the issue reemerged at executive committee with a new recommendation that the Kiwanis Club stay in charge, as long as it is willing to make substantial changes.

The Club proposes to renovate the building's interior, add a new year-round restaurant and focus on attracting tourists from within the city.

The precise details are still to be sorted, but the plan could also see the city nominate 50% of an expanded 14-member board, with Kiwanis members reserving the power to break a tie.

Councillor Joe Mihevic, who sat on CLAC, moved a motion the public trust idea be revived.

Mayor David Miller spoke against that option.

"This isn't coming as a blank slate out of the blue," he said. "It's coming with a history and the Kiwanis have had an important part of that history, and I think it's important for us to respect that," the Mayor said.

The plan still has to win the full council's approval.

kpatrick@nationalpost.com