SPAGO LEAVING TOWN . . . Spago, the high-end downtown Palo Alto restaurant known for its fine food and high prices, is pulling out of Palo Alto at the end of May to concentrate on other directions, such as alliances with luxury hotels, the Wolfgang Puck chain of restaurants announced Friday. Called it a delayed victim of the 2001 dotcom bust, perhaps, when empty tables replaced waiting lines. Spago management dropped a big hint of changing directions last January — reported in Shop Talk — when it announced it would not do its annual gourmet Passover Seder, personally prepared by Puck and always sold out for the six years it has been presented. No word yet on the fate of other Spagos in Beverly Hills, Las Vegas and Maui. The Palo Alto Spago has about 50 employees, some of whom may be able to transfer to the dozen or so other restaurants owned by Puck, including the award-winning Postrio in San Francisco. The impending departure has started a flurry of talk and phone calls about a replacement restaurant for the historic building, which dates from 1927 when it was built to house the Tinney & Sons Mortuary. Tinney later combined with Roller & Hapgood, and the building began a new life as a restaurant when it was remodeled to become The Gatehouse in 1974. After a 20-year run during which it became a community fixture, The Gatehouse gave way to Stars restaurant in 1995, owned by a group of 60 Silicon Valley investors who put in about $2 million in upgrades. But after a couple of bumpy years, the investors switched horses, or celebrity chefs, and teamed up with Wolfgang Puck, with a major redesign of the interior by architect Adam Tihany. "Money poured in," General Manager and partner Alex Resnick told a Weekly food reviewer last year, until the bust of 2001 left empty tables. "Customers were gone after 2001," he added. Despite a comeback and some loyal regulars, the recovery has been too slow, and Puck's company will look for new venues.

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