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The Museum of Decorative Arts and Design was established on January 1, 1989. On July 6, 1989 it opened its doors to visitors. Until the year 2000 the museum was a constituent part of the Latvian Art Museums' Association. In January 1, 2000 it received an independent legal status and since then it has been operating as a state museum and is subjected to the Ministry of Culture of the Republic of Latvia. Starting from January 1, 2010 the Museum of Decorative Arts and Design has been incorporated into the Latvian National Museum of Art.

The museum is located in Old Riga within a complex of buildings which are of great historic significance. It is situated in the former St. George's Church – the oldest surviving stone building in Riga (architectural monument No. 6565 of state significance). The white dolomite edifice holds the reminiscences of 800 years long history of the city itself. Already around 1204 alongside with the construction of the Livonian Bishop's Albert's residence, the erection of the Sword Brothers' Order's Castle was started. The complex of houses occupied the territory between the present day Skārņu street, Kalēju street and Jāņa Court. Chronicles testify to the fact that already in 1208 in the southern part of the castle there was a chapel dedicated to St. George - the patron of knights. They report also about constant disputes and armed clashes between the Order, the Bishop and Riga citizens fighting for domination in the town. During the first severe conflict in 1297 St George's Church was set on fire and burned down. After some renovation works in the 14th century the Hospital of the Holy Spirit moved into St. George's Church, but in the 15th century it was handed over to a Franciscan Order monastery. Due to massive unrest during the Reformation in the 16th century St. George's Church was demolished. In the 17th and 18th centuries merchants trading hemp, linen and timber settled in the former church. The church was greatly reconstructed following the specific needs for keeping storage. The church building was converted into separate storage houses called - Blue, White and Brown Dove, which continued to serve for the needs of keeping goods till the mid-1980s. In the 1980s the Polish restoration firm of historical monuments PKZ started archaeological, historical and architectural research of the site, afterwards followed by reconstruction works of the building which were completed in 1988.

Museum of Decorative Arts and Design, 10/20 Skarnu Street, Riga, LV-1050, Latvia