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The Katz Group project includes two proposed hotels and a casino east of the arena, a student residence, a small practice arena and an office tower and parkade to the west. ((Edmonton Arena District))

Questions about a funding model for a new arena and entertainment complex in downtown Edmonton have prompted the city and the Katz Group to postpone a public hearing on zoning for the proposed project.

Katz Group spokesperson Bob Black told a news conference Monday the hearing was postponed so a funding model for the new arena could be worked out.

"Zoning and funding really are distinct matters and they need not be interconnected but it had come clear to us that, given the profile of this particular project, they were becoming interconnected," Black said. "And that the issues on funding really were distracting for the consideration of the zoning application."

The hearing on the group's proposal to rezone a block of land on the present site of the Baccarat Casino just north of downtown had been scheduled for June 28. A new date wasn't announced.

The Katz Group has never said how the complex would be funded, beyond a $100-million commitment from Daryl Katz, owner of the Edmonton Oilers.

Many people in Edmonton have expressed opposition to a plan that would see taxpayer dollars go towards an arena that houses a privately owned NHL team.

At least one councillor appeared to welcome the postponement.

"This is simply an acknowledgement, I think, of that fact that council, who's going to make the decision, just really doesn't feel there's enough information to put all the pieces together and allow a rezoning," Coun. Bryan Anderson said.

The delay also could push back the announcement of a proposed funding model until after the Oct. 14 municipal election, which means councillors might avoid a potentially controversial issue during the campaign.

But Coun. Don Iveson said the lack of a solid plan could be worse.

"I can see the debate about this issue just going completely off the rails," he said. "My hope is that the Katz Group will actually tell us what they would like from the city and then we can all talk about whether that's a good idea or not."

Proposal includes hotel and office towers

In April, the company, owned by Edmonton Oilers owner Daryl Katz, submitted a rezoning application to the city for the new downtown arena and entertainment centre. The proposal includes plans for a casino, a hotel and office towers, a student residence and apartments.

It also includes more apartments and an office tower around a plaza south of 104th Avenue, which would be linked to the arena by a walkway.

The complex would be located on a 6.5-hectare site that is currently the home of the Baccarat Casino and would replace the aging Rexall Place, where the NHL team plays now.

The Katz Group wants construction on the arena to start by January 2012, with the facility open for the start of the NHL season in 2014. Black said they still want to stick with that schedule, even with the hearing being delayed.