(Editor's note: This article has been updated with additional background.)

The Jalapeño Tree restaurant in Sherman located at 2916 North U.S. Highway 75, suite 100 has closed. The Jalapeño Tree restaurant in Denison remains open, according to a prepared statement from the restaurant’s ownership.

The statement said all employees of the Sherman location have taken positions at the Denison location. That location, 3520 FM 120, “first opened in April of 2005 and will continue to serve Crazy Good Mexican Food to the entire Texoma area for many years to come. All Jalapeño Tree restaurants are family owned and operated and fully committed to the communities they serve.”

In March, Sherman’s Planning and Zoning Commission granted permission for a liquor store to replace the Jalapeño Tree, though, at that time, both the property management team for the landlord and Jalapeño Tree management said there were no plans to close or move the popular eatery.

In May, the Sherman City Council approved the specific use permit granted by the Planning & Zoning Commission to allow Nandi Bhattarai and tenant Reggis Liquor #75 to open a liquor store at 2916 North U.S. Highway 75, suite 100. At that time, Jalapeño Tree Holdings LLC President Paul Bambrey said the company was still negotiating to remain in the space.

“It is always a landlord’s right to have a backup plan,” Bambrey said via email in late April.

Jalapeño Tree Holdings LLC President Paul Bambrey could not be reached Wednesday for a comment.

Sherman Director of Developmental Services Scott Shadden told the city council the specific use permit wouldn’t apply to any other suite at that address. The property is known as the Shafer Plaza Shopping Center and sits between U.S. Highway 82 and Cornerstone Drive.

Dave Valdez, who works in asset management for Tava Property, which owns the property in Shafer Plaza Shopping Center where the Jalapeño Tree was located, couldn’t be reached for a comment Wednesday afternoon.

He said in March that Bhattarai had approached Tava Property about being in Jalapeño Tree’s location and his company has talked about the liquor store with him “in good faith.”