WAVERLY - Not quite two years after it opened, Pablo's Mexican Grill has closed its Waverly location.

Owners, citing too much space and too much overhead for the diner, opted to shut it down Feb. 27 to concentrate on their other restaurant, at 310 Main St. in Cedar Falls. The Waverly store was in the Fourth Street Plaza, near the Waverly Wal-Mart Supercenter.

"We had decent volume, but the location was way too large," said co-owner Lee Cronkhite, who was one of several friends who late company founder Paul Heine organized to launch the Cedar Falls restaurant five years ago and, then, the Waverly unit in March 2007.

"It came down to the lease price, and the overhead was quite a bit more than we could afford," Cronkhite added.

Heine died in a car crash about a month after the Waverly restaurant opened, Cronkhite said. Ninety percent ownership of the company went to Heine's sister, who lives out of state. Cronkhite said he has a 10 percent stake.

The restaurant employed 13 people, including two full-time managers, Cronkhite said. One hourly employee was shifted to the Cedar Falls store, he added.

The restaurant lost about $35,000 last year, Cronkhite said. The expense of running the restaurant in Waverly had cut into profits in Cedar Falls, Cronkhite said.

"The Cedar Falls operation has been doing pretty good," he said. "That's been supporting the Waverly store for the last year and a half or so. Most of that was tied into the original lease that Paul set up with Riggs Real Estate."

Pablo's occupied 2,800 square feet of a 10,000-square-foot building that houses several other tenants, including Lincoln Savings, a Century 21 real estate office, a U.S. Cellular agent, Cost Cutters hair salon and Northern Iowa Therapy.

Pablo's was an original tenant of the Fourth Street Plaza, which was built in 2007 on the southern edge of Waverly, along Business Route 218.

"We've immediately begun trying to re-lease it to an alternative user, whether a restaurant or another potential user," said Ben Neil, broker with Riggs. "We're open to anything that can be located there."

Pablo's operators will shift their focus to the Cedar Falls store.

"There will definitely be some changes," Cronkhite said. The restaurant also is weighing plans to start a delivery service - first, in a limited area in the surrounding neighborhood and, perhaps, later, more full-blown delivery around Cedar Falls, Cronkhite said.

And, he added, the company isn't necessarily finished doing business in Waverly.

"Lots of people have been asking if we were still planning to put another location up there, but we have to catch up on some of these back bills," he said. "I'd consider a smaller location, more centrally located."

Contact Jim Offner at (319) 291-1598 or jim.offner@wcfcourier.com.