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Nacho OrdinaryTex-Mex

El Palacio offers dishes from Mexico, by way of the Continent

The staid, storied building at 3512 Main that once housed Christie's first Houston outpost underwent a startling transformation this summer. Painted an eye-popping shade of coral and festooned with Christmas lights, the restaurant now called El Palacio is impossible to overlook amid the surrounding grayish flotsam and jetsam of midtown. I admit I first scouted it with some suspicion: It's just so pink and, um, elephantine.

"It's actually a very historic location," points out El Palacio's chef and co-owner Matt Khajehali. "It was built in 1935 as the Spanish Palace, so maybe we're just returning it to its roots. Then it was George Kelly's Steak House, which was the best steak house in Houston at that time; all the politicians hung out there. Then Mr. Christie bought the building and owned it for 25 years. Some of our senior customers tell us they used to work here as waitresses or busboys in the old days."

But the real surprise waits inside: This ain't your ordinary Tex-Mex. Khajehali also happens to be the owner and chef of Bistro 224 (224 Westheimer, 529-3224). And as many Bistro-savvy customers have already discovered, at El Palacio you can get new interpretations of 224's classic Continental dishes at bargain prices.

Take the Huachinango Borracho, for example. Known as Snapper Tequila at Bistro 224, where it's a customer favorite, the dish features a pan-seared fresh snapper fillet topped with shrimp, doused in a delightfully light tequila lime sauce. The fillet is gently egg-washed and floured then perfectly cooked so that it flakes under the fork. The only difference is that at the Bistro, Khajehali uses crabmeat instead of shrimp and charges around $18 instead of $11.95.

"It's only right that Tex-Mex cooking should be less expensive than Continental cuisine," explains the genial Khajehali. "I want to make the best Tex-Mex in town, but I will keep the prices reasonable."

Another Tex-Mex entree with Continental flair is the Pechuga Acapulco ($7.95). A grilled chicken breast is kept incredibly moist by its marinade of lemon juice and black pepper, again lightly dredged in egg wash and flour, then blanketed with melted Monterey Jack cheese. Slices of buttery-rich avocado and really ripe tomatoes are tucked between the covers. Serviceable sides of rice and beans -- refried or charro -- round out the plate.

Despite the uptown influence, there's still quite a bit of tried and true Tex-Mex to be found on El Palacio's menu, including tacos, enchiladas, flautas and -- new this month -- menudo. By far, my favorite traditional entry is Khajehali's version of fajitas. As with so many of his dishes, the trick is in the marinade. For fajitas, he marinates both beef and chicken in a citrusy blend of papaya, pineapple and orange juice along with the usual soy sauce, garlic and shallots. The result is an extraordinarily tasty fajita plate ($8.95) or tacos al carbon ($8.95) wrapped in tender flour tortillas. Both are served with lightly browned, almost caramelized strips of sauteed onions still sweet in the center, sizzling green peppers and guacamole made from scratch.

Then there's the Camarones Diabla ($11.95). Some Tex-Mex restaurants are only kidding when they label a hot dish "diabla." Fair warning: Khajehali is not kidding. El Palacio's version approaches satanic majesty. Tail-on shrimp are bathed in a deep red sauce of chipotles en adobo and tomato; the taste is resonant, smoky and hair-raising. One bite blew me away, but a friend deeply committed to heat happily plowed through the whole plate, pausing only long enough to mop his sweat-shiny face with handfuls of paper napkins.

Even the shrimp in the queso flameado con camarones appetizer ($6.95) are plenty warm, thanks to the chipotle peppers in their sauce. The shrimp are sauteed, folded into gooey melted Jack cheese and served with more of the lovely soft flour tortillas. "Soon we'll be hand-making our own tortillas right in the front of the house, where the chimney is," promises Khajehali. "They'll be even better then."

The only clunkers I've discovered on El Palacio's menu are the jalapenos stuffed with crabmeat ($5.95). They sound like a recipe for success but stop disappointingly short of stardom. True, the pickled jalapenos are tasty, the crabmeat tender and plentiful, and the light breading crunchy, but the result is less than the sum of its parts. The gluey, yellowish tartar sauce is part of the problem and should definitely be replaced with something simpler, perhaps a sour cream dip or red cocktail sauce.

Since it opened in May, El Palacio has drawn a strong lunch crowd from downtown and the nearby medical center. "I don't want to discourage anybody," says co-owner John Florez, "but for lunch you might want to make reservations." Khajehali and Florez have only recently extended into dinner hours. It's much easier to get a seat at dinner, as few people yet venture into the midtown wastes after dark; on the other hand, at night I find the bluish overhead lighting in the main dining room oppressive. No one over 35 willingly sits under overhead lights, and the ghastly blue reflected from the room's curved ceiling makes dining companions look ghoulish. Better seating --and less-scary lighting -- is available in the tinsel-trimmed entry room containing the bar, which has the fragrant attic-y smell of old, dry wood. Attrac-tive French doors span the front wall, leading to a small patio for outdoor dining in warmer weather.

The new happy hour is a good bet, too. El Palacio's house margarita is a "gold" version made with Grand Marnier; during happy hour, it goes for only $2 a pop. "I wanted to make people an offer they can't refuse," Khajehali chuckles.

So why would a busy and successful chef such as Khajehali strike out in such an unexpected direction with a second restaurant? Maybe he's betting on the location: Midtown is the darling of the current buzz, with rumors that renaissance and reconstruction will overflow there from the hyperdeveloped downtown district. His new partner, Florez, speculates that Khajehali was just ready to stretch his culinary repertoire in new directions, and certainly El Palacio has a menu to watch (Bistro 224's menu took almost two years to evolve).

But Khajehali himself offers a simpler answer. "Mr. Christie," he says with a laugh, "made me an offer I couldn't refuse."

El Palacio Mexican Restaurant and Cantina, 3512 Main, 807-7755.

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