A city report is cautioning Edmonton councillors about a proposal by Northlands to spend $770,000 on new lower level seats for Rexall Place.

With talks underway for a new downtown arena, the report recommends council consider the timing of the proposal which is contained in Northlands' latest capital plan.

According to the contract Northlands has with the city to lease Rexall Place, councillors can veto renewal projects that cost more than $750,000.

"That is the contractural agreement that they have entered into with the city that if council objects to any one of those projects, then those projects won't go forward," said Lorna Rosen, the city's chief financial officer.


Chief Financial Officer Lorna Rosen said city councillors have the right to veto renewal projects proposed by Northlands that cost more than $750,000. CBC (CBC)

But at least one councillor rejected the advice contained in the report which will be discussed at next week's council meeting. 

"Certainly I wouldn't recommend letting the place go to hell in a hand basket because of somebody's anticipation that there might be an arena," said Coun. Tony Caterina.

"Right now, the chances are that there's not going to be an arena because the funding isn't there."

The $450 million downtown arena and the land it sits on will be owned by the city of Edmonton but the building will be operated by Edmonton Oilers owner Daryl Katz.

The Oilers and city are short $100 million in funding for the project. Rosen confirmed Mayor Stephen Mandel sent the provincial government a formal request for the cash last month.

Premier Ed Stelmach has so far rejected any suggestion that the province will write the city a cheque for $100 million. But he indicated this week that the province might be open to helping with related infrastructure projects.

"LRT, water, sewer, all of those that are joint responsibility of the city and the province," he said.

But Caterina disagreed with that strategy.

"I don't think anybody out there is naive enough to believe that putting it somewhere else is going to disguise the fact that it's going to a private business for the arena project," he said.

Under a framework agreement with the city, The Katz Group pledges to contribute $100 million to the cost of the arena.

The city will contribute $125 million and another $125 million will come from a user-paid facility fee. The source of the outstanding $100 million still hasn't been determined.