Palacio Delivers Modern Mex in Historic Mansion

Four is the charm in this gorgeous old building that has housed three previous restaurants.

Palacio Restaurant on Urbanspoon

(This will be published in South Bay Accent in December, 2011.)

At first glance, an 1891 Queen Anne-style house with turrets, gables and abundant gingerbread would seem to have nothing in common with Mexican cuisine.  But the ghosts that supposedly inhabit the historic Coggeshall Mansion in downtown Los Gatos must be working a little magic because recently opened Palacio (loosely translated, it means “mansion” in Spanish) has quickly become the hottest show in town.

The mansion has long been a head-turner on the city’s main drag, so there was logic behind making it into a restaurant back in 1977.  Three incarnations later, it is now Palacio, focused on upscale Latin food, a bustling bar scene and what seems to be acres of outdoor seating on the decks and patios surrounding the gorgeous old house.

Launched by the team that owns the Forbes Mill steak house and a popular sports bar in town, Palacio checks all the boxes for desirable Los Gatos dining: approachable food, cool location and lots of noise. Locals have had a long love affair with Mexican cuisine — the first Pedro’s opened there in 1972 — but Palacio isn’t duplicating the swimming-in-cheese-and-sour-cream Americanized style of many other Mexican eateries.  Chips and salsa aren’t free here and good luck finding any strolling mariachis.

Spice-crusted ahi with veggies is a good entree choice.

Rather, guests are treated to more authentic Mexican dishes interpreted in a high-end direction. Among many enticing starters is a trio of sopes (little pancakes of fried cornmeal) topped with spicy braised chipotle chicken and queso fresco, crumbly, tart fresh cheese that’s totally unlike shredded jack.

There are several other little bites worth ordering.  Small cornmeal turnovers are stuffed with truffle-like huitlacoche, herbs and a sweet, hot sauce.  Moist mini tamales can contain a choice of shrimp with chile sauce or pork with tomatillos. And the teensy soft tacos are tasty, particularly the al pastor-style pork with pineapple.

Also beckoning is a “salad” containing grilled asparagus, cotija cheese and Serrano ham in truffle vinaigrette, or a plate of steamed mussels swimming in cilantro butter and garlic.  Palacio does a particularly nice job on ceviche, which comes in three preparations featuring either halibut, shrimp or tuna.  The last one is the best, with raw ahi “cooked” in lime juice and paired with diced watermelon, avocado and chipotle.

Seafood sings at Palacio, like seared day-boat scallops.

Entrees continue the theme of quality ingredients and recipes somewhere in the general neighborhood of true Mexican cuisine. None of the usual combo plates nudging lakes of refried beans and rice are found here.  Seafood, in particular, is irresistible.  Say, grilled Loch Duarte salmon riding on a sweet/tart salad of spinach, mango, pickled onions, pecans and chipotle vinaigrette.  Or gorgeous slices of spice-crusted ahi crowning a tasty salad featuring cucumber, jicama, carrots and cherry tomatoes in a citrusy, slightly spicy dressing.  There are seared scallops with a square of green rice gratin and pumpkin-seed-crusted halibut as well.

Temptations on the meat end are led by roasted duck breast with an utterly fabulous duck confit enchilada.  Free-range chicken comes in two iterations but carnivores gravitate toward grilled strip loin with ancho demiglace or juicy braised pork with pickled onions.  Even the side dishes are upscale, such as buttery beans with tomato and cactus-leaf salad or jasmine rice with corn, beans and tomato sauce with queso fresco.

Mexican donuts — churros — are a popular finale, served with chocolate pudding for dipping.

Desserts are a bit above the usual norm.  Walnut flan is too sweet and has little nut flavor but guest often rave about the warm churros (fresh donuts) served with chocolate pudding sauce, or a tropical cheesecake with coconut.

The wine list is average but the extravagant margaritas seem to be the go-to drink at Palacio.  In keeping with the overall quality theme, these are made with good ingredients and come in six versions.  Best is the “Gran Palacio” with lime juice, aged tequila and Grand Marnier.  Or sip one of several other signature cocktails in the rousing bar, now moved to the front of the stately old building.

A madhouse on weekends, Palacio employs the requisite young wait staff that does its best to keep up with the demanding throngs — not always succeeding, alas.  Fortunately, our server employed a no-questions-asked approach to screw-ups, quickly replacing a prematurely removed drink with a new replacement.  If she had only stopped inquiring whether we liked our dishes before we had a chance to taste them.

Top-shelf margaritas are the go-to drink.

However, Palacio is still in tune with today’s Los Gatos dining preferences and the service will probably improve over time.  Gliding into this resplendent Victorian mansion is kind of exciting and the food — priced a little below the mansion’s last restaurant inhabitant, Trevese — is definitely interesting enough to draw big crowds from many age groups.  As one of Palacio’s owners has said, “people love Mexican food.”  True. And this version is pretty darn good.

Palacio, 115 N. Santa Cruz Ave., Los Gatos, (408) 402-5085, www.facebook.com/palaciorestaurant

HOURS: Dinner, 5-9, Monday-Tuesday; 5-10 Wednesday-Thursday; 5-11, Friday. Open 10-11 Saturday and 10-10 Sunday.  Reservations recommended.

PRICES: Starters, $5-14; entrees, $12.95-28.25; sides, $5-7; desserts, $7.

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