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In the second half of the 17th century, wealthy residents of Tallinn started to build summer residences with parks for themselves. In 1714, Peter the Great purchased 5 Swedish summer estates located on a plot of land between the Narva and Tartu highways. The house built by Heinrich Fonne, a member of the magistrate, soon became known as the "old palace" of the tsar. It was a convenient place to spend the night and admire the picturesque surroundings. However, the structure with its small size and modest decoration did not correspond to its purpose.

Peter the Great had seen the majestic and splendid palaces in France, Germany, and Holland. The concept of park architecture was to emphasise the power of the autocrat, the arrangement of plants had to be symmetrical and correct, eloquently saying that even nature was subordinate to the ruler. However, Peter was also able to appreciate the natural beauty of nature. Kadriorg was a compromise between a regular park in the centre and a landscape park on the outskirts. The park was conceived as a public park, free for citizens and guests to visit, and it remains so to this day.

The birthday of the palace is celebrated on 22 July. It was on this day in 1719 that Peter the Great together with the architect Nicolo Michetti measured the territory for the future "new palace" and the regular park. The palace consists of 3 parts. The main building and wings seem to rise on a podium. All 3 parts are connected by lattice walls covered with balustrade, and in the centre there is a small fountain with a mascaron.

.Although the architect of the Cardiorg Palace was the Italian Nicolò Michetti, the French influence can be felt: on the plan it can be seen that the palace has wings projecting towards the flower garden. The high ceremonial hall, occupying 2 floors, resembles two-light "Italian halls", which is particularly emphasised by the rich stucco decoration of the ceiling and walls, made in the Roman Baroque style.

The private rooms of the Tsar and Tsarina were placed in the wings of the palace, as per French palace etiquette. Peter the Great's study and wardrobe were located in the north wing so that it was possible to see the sea from the windows. The wings and the basement were allocated for service premises. The royal kitchen was also located there, where the cafe is now.

The main idea behind the design of the magnificent state hall was imperial baroque with monograms of the palace owners, imperial crowns and eagles of the Russian coat of arms surrounded by winged geniuses trumpeting eternal glory. The plafond paintings and moulded medallions are also dedicated to Peter and Catherine, as well as to Russia's victory over Sweden in the Great Northern War.

However, the client did not get to see the Kardiorg Palace in its completed state. When Peter the Great died in 1725, the palace was still surrounded by scaffolding. And even in 1727, the year of Catherine I's death, not all the ceilings had yet been plastered.

After the architect of the project returned to Rome, the work continued to be supervised by his Russian talented assistant Mikhail Zemtsov. He wanted to complete the work following the original design, however, the provincial residence was no longer of much interest to the royal court, and the architect was ordered to reduce the construction of the project. The number of fountains, sculptures, and decorations was reduced.

Later on, starting with Elizabeth Petrovna and ending with the last Emperor Nicholas II, the Cardiorg Palace was visited by all the crowned persons of Russia, except Paul I. Before each such visit the palace was restored and put in order. In 1806 the palace, which was already in ruins, was restored by order of Alexander I. And in the period from 1828 to 1832, on the orders of Nicholas I, the entire palace and park ensemble was renewed.

After the overthrow of tsarist power, the palace briefly housed the Tallinn Council of Workers' and Soldiers' Deputies. In 1921, the palace became home to the Estonian Museum. The palace underwent major changes between 1933 and 1940, when it was transformed into the seat of the state. According to the project prepared by A. Vladovsky, a banquet hall, a small dining room and a winter garden were added to the palace. Some rooms were decorated in a new way. The facades and interiors of the palace were also restored.

After the Second World War, the palace was again placed at the disposal of the museum. In 1991, the museum collection had to be relocated, as the palace building was so dilapidated that it required serious repairs. The long process of major repairs and restoration work of the Kardiorg Palace began. On 22 June 2000, on Kadriorg's birthday, the Kadriorg Art Museum was opened in the palace. The palace now houses the foreign art collection of the Estonian Art Museum. In addition to exhibitions, concerts, theatre performances, receptions and lectures are held here. The reconstructed upper flower garden behind the palace is an 18th-century design and is open to visitors in summer.