Updated on 6/21 at 12:45 p.m..

A developer's effort to build Minneapolis' first Trader Joe's in the Lyn-Lake area fell short Thursday when a key city panel voted against rezoning.

The decision, which must be ratified by the full City Council, effectively kills plans to develop a 40,000-square-foot area into a grocery and liquor store on 27th Street and Lyndale Ave. South. The city's zoning and planning committee denied rezoning on a unanimous voice vote.

The project needed a higher-grade commercial zoning to accomodate the size of the development and a proposed liquor store attachment.

“This is not about Trader Joe’s. This is about a zoning change. Period," said Council Member Meg Tuthill, who represents the surrounding area.

Tuthill opposed rezoning because it would benefit "one entity and one entity only."

"That totally goes against my grain," Tuthill said. "I personally consider that spot rezoning. I don’t think it's healthy."

In a staff report prepared for Thursday's meeting, city development staff recommend that the rezoning be approved. The report said rezoning could be considered in the interest of one property owner, but also in the "public interest" because it is consistent with policies for commercial corridors.

The board of the local neighborhood group, Lowry Hill East Neighborhood Association, voted against a measure to support the rezoning, however.

Gary Schiff, chair of the zoning and planning committee, noted that the parcels already contain mixed-used developments.

“We would be going a big step backwards rezoning this for a single-use development," Schiff said.

A representative of TOLD development, Trent Mayberry, declined to comment immediately following the vote. The Council will likely take final action on the project next Friday.

The store would have been Trader Joes' first in Minneapolis. The existing metro-area locations are in St. Paul, St. Louis Park, Minnetonka, Woodbury and Maple Grove.

It's not the first time the grocery chain has tried -- unsuccessfully -- to break into Minnesota's largest city. Trader Joe's attempted to open a store at 22nd Street and Lyndale Ave. South in 2009, but failed to garner necessary exemptions to bypass a spacing requirement between liquor stores.