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Palacio Restaurant Restaurant Review: Palácio --- the latest restaurant to occupy a landmark Queen Anne Victorian mansion in downtown Los Gatos --- offers chef Lee Hernandez’s take on the flavors of Latin America, with a few detours into Spain. The menu includes more than a dozen tapas as starters, ranging from two types of ceviche to duck confit tostadas. Highlights include the albondigas, pork and beef meatballs atop a bed of mashed potatoes; camarones a la diabla, grilled shrimp with a spicy habanero sauce; and piquillo peppers stuffed with seasoned goat cheese. Seafood main courses include paella and several types of fish; a good choice from the “de la tierra” section is Hernandez’s updated version of ropa vieja, featuring braised short ribs and creamy polenta. Desserts include flan and churros. For a drink and a quick snack, there’s a popular bar with an extensive selection of tequilas.