Edmonton Northlands says it will not charge a tax on tickets to concerts and other events at Rexall Place even if the tax is part of the city's downtown arena plan.

"It's a ludicrous concept," says CEO Richard Andersen.

"It's absurd to charge a ticket tax where the revenue would go into the city's general revenues"

He says his organization would need that revenue for such things as ongoing maintenance.

"We're not going to agree to a tax where we would need the revenues to create a continually safe and comfortable facitliy for the community to come to."

The Katz Group agreed to place a surcharge on all tickets for events held at the proposed downtown arena to raise $125 million towards the $480-million building.

But to keep a level playing field between the competing arenas, Northlands would also be required to charge a ticket tax as well with those revenues going into city coffers.

"Legally you really can't do this," said Andersen.

But Coun. Bryan Anderson disagrees.

"Their advice is wrong," he said.

Despite the disagreement, Coun. Anderson believes the new arena will proceed.

"If nobody blinks or backs away eventually there will be a court decision," he said. "I do not think there is any derailing potential here."

Council is scheduled to ratify the new arena's legal agreements later this month.

With files from CBC's James Hees