A Santa Fe businessman who has leased the former Palace Restaurant says he wants to return the downtown eatery and watering hole to its glory days.

David Bigby, who said he retired from a web business in Dallas, is in the process of hiring a staff to run the restaurant.

"The idea is to create a place that's like the old Palace, but a place that's modernized and updated a bit," Bigby said of the vacant Palace Avenue space a couple of blocks west of the Plaza. "We're still working on the architectural plans."

"We want it to be a locals' hangout like it used to be," he said of the one-time bar and restaurant.

The news comes after a period in which several local, full-service restaurants closed down in Santa Fe. Many owners cited the struggling economy as a reason for the business slowdown in the hospitality industry.

The Palace Restaurant, 142 W. Palace Ave., has been closed for years. The last operator converted it to a place called Señor Lucky's at the Palace — a Southwestern-themed restaurant that featured a mechanical bull, among other changes from the original Palace. The business was shuttered in February 2007.

The original Palace, known for its dark wood, red wallpaper and subdued lighting, had long been one of Santa Fe's more elegant dining establishments. The spot's naughty Old West history — it was built on the site of a Burro Alley gambling saloon run by a woman known as La Doña Tules — was incorporated into its theme. The saloon in the Santa Fe Trail days became known as a house of ill repute, patronized by traders, trappers, merchants and military officers. It flourished until La Doña Tules died in 1853.

More recently, The Palace was owned by Santa Fe restaurateur Nino Pertusini. After almost 20 years, he sold it in late 2003 to a New York restaurant owner, Jean DeNoyer. DeNoyer sold the operation without explanation less than six months later to restaurateur and nightclub owner Cliff Skoglund and others — including BGK, a Santa Fe property-management company.

After the restaurant closed, Billy Harris, whose Harris Group of Albuquerque owns the property, said he wanted a tenant who would create something like what The Palace was before. "It's a matter of getting the right person, one who understands downtown Santa Fe and what The Palace was," he said. Harris wasn't available for comment Tuesday.

Bigby, who holds degrees in marketing and industrial/organizational psychology from the University of Houston, said his previous endeavors included starting a consulting practice, which sold to a company called Merlin Technologies in 2007.

Bigby said he already has applied for a liquor license and hopes to have the business open by the end of July. He's also been looking for a managing chef and 15 to 20 employees.

Bigby told local chefs through an online Craigslist exchange that "we need you to manage all aspects of the food operation and complete our team. Come help us restore the Palace to its former glory and more."

In the same communication, Bigby said The Palace will serve lunch and dinner 5 1/2 days a week, with a seating capacity of 50 in the bar, 50 outside and 100 in the fine-dining area.

Bigby said he can't comment on the kind of food The Palace will serve until he has hired his chefs.

Contact Bob Quick at 986-3011 or bobquick@sfnewmexican.com.