St. Paul residents may wonder why their property taxes are going up in 2012 even as the amount of services and amenities the city can afford to provide goes down.

State cuts in local government aid provide Mayor Chris Coleman and the City Council with a ready-made, reasonable explanation for this paradox, but I know at least three business owners who might suggest another factor.

Each wanted to expand or relocate to St. Paul. Their projects would have resulted in higher property tax payments to the city; two of the three would have brought additional jobs.

Each also had some level of city approval, until they were hijacked by neighborhood opposition. As a result, one project is dead, one appears headed for court and a third is in suspended animation.

Industrious opposition

Developer John Allen thought the vacant former trucking site on Pelham Boulevard, about a half-mile from the new Central Corridor light-rail line, was the perfect spot for a new, 68,000-square-foot office/warehouse building.

Residents nearby would rather see housing there, even though it's been an industrial site for more than 50 years. When they lost that battle, they objected to Allen's project on aesthetic grounds, including the fact that the one-story building included too many parking spaces. So, Allen agreed to spend an additional $200,000 on landscaping.

Understand that the site Allen wants to build on is bordered by Interstate 94 and surrounded by other office and industrial uses, including the Rock-Tenn recycling factory. The nearest home is about 300 yards away, on the other side of the interstate. The light-rail station on University Avenue will be almost a half-mile away.

The city's zoning and planning commissions approved the project, which also had the support of the St. Paul Port Authority, which invested more than $4 million to buy and clean up the site, as well as the Midway Chamber of Commerce and St. Paul Area Chamber of Commerce.

Allen already had his building permit in hand in October, when residents convinced the St. Paul City Council to overturn the project approvals.

Allen sued the city last month. "People should understand how extraordinary the City Council's decision was, and how far-reaching," Allen said by phone Tuesday. "If you think you can develop your property in St. Paul, just as long as you comply with every last objective requirement in the zoning ordinance ... think again."

Cupcake wars

Kevin Vanderaa's University Avenue bakery and cafe, Cupcake, has become a popular fixture in Minneapolis' Prospect Park neighborhood. And in December, it seemed like all systems were go for him to open a bakery and 37-seat wine bar at 949 Grand Avenue in St. Paul.

Not quite.

Twenty-three days after the city had granted him a parking variance and issued a building permit, a neighborhood group and a nearby law firm filed an appeal. They noted that two of the six off-street parking spaces Vanderaa had leased could be taken away, meaning instead of the required 10 spaces he might, at some future date, have only eight.

Vanderaa had planned to invest up to $300,000 in the new restaurant, and said he'd employ between 15 and 20 people. He'd already started work when the City Council upheld the appeal.

Vanderaa, who has stopped work and backed out of the project, did not return calls.

Pizza, parking, politics

The building had been vacant for three or four years before Pizza Luce bought it and invested more than $1 million to turn a blighted stretch of Selby Avenue into a popular gathering spot.

When another commercial property across the street went into foreclosure, Pizza Luce CEO JJ Haywood saw an opportunity to add more parking spaces. Her company paid $120,000 for the lot, had the building demolished and applied for permission to create 11 parking spaces.

"We didn't think it would be a big deal," Haywood said. "It was already zoned commercial, and it already had three parking spaces on it."

This time, the neighborhood group voted in favor of the request. But another group of residents has banded together and gathered enough signatures to appeal the zoning exception. The City Council heard their appeal last week, but continued the matter until next month.

So, there you have it. One project was killed because it had too many parking spaces. Another was killed because it might, one day, have two spaces too few. And a third is on hold because residents object to a sensible plan that would alleviate street parking.

Any business owner or developer accepts the fact that rents, taxes and permit and license fees make doing business in the central city more costly and complicated that in the suburbs. And if they're building in neighborhoods -- which is where the only economic development action is in St. Paul these days -- they know striking a balance between their interests and those of residents is part of the deal.

Balance cuts both ways, though. Until some St. Paul residents acknowledge that, soaring property taxes will remain a fact of life.

ericw@startribune.com • 612-673-1736