The council held a public hearing after an appeal was filed by a Winona couple who wanted the decision in favor of Mikrut Properties overturned.
Joel and Marilyn Bjorlo opposed the variance, with Marilyn speaking during the hearing about concerns of truck traffic and fumes.
Winona City Code states railroad yards and freight stations must be located at least 200 feet from any residential zoning district. The rail spurs are proposed to be located 135 feet from a residential district occupied by the Bjorlos.
Rich Mikrut told the council his intermodel freight transfer facility would be another example of good economic development.
Council members Al Thurley, Pam Eyden and Gerry Krage voted against affirming the decision, stating concerns over the setback footage and safety concerns about the nearby park and daycare facilities.