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Preheat oven to 350°F. Lightly coat a 3-quart rectangular baking dish with cooking spray; set aside.
In a large saucepan, melt butter over medium heat. Add leeks, water and 1/4 teaspoon salt. Cook for 10 to 15 minutes or until tender and most of the liquid has evaporated, stirring frequently. Remove from the heat.
In a very large bowl, whisk together milk, Parmesan, 1/4 cup parsley, flour, pepper, nutmeg and the remaining 1/2 teaspoon salt. Add potatoes and sweet potatoes; toss to coat.
Layer half of the coated potatoes in the prepared baking dish. Top with half of the leeks. Repeat layers. Pour any remaining milk mixture over potatoes.
Coat a large piece of foil with cooking spray; cover the baking dish with foil, placing the foil coated-side down. Bake for 45 minutes. Increase oven temperature to 425°F. Sprinkle with Cheddar. Bake, uncovered, for 20 to 30 minutes more or until potatoes are tender and top is golden brown. Let stand for 15 minutes before serving. Sprinkle with the remaining 1/4 cup parsley.