Edmonton could make $500 million by shutting down its City Centre Airport and selling the 217 hectares of land for development, says a city report.

The report, released Wednesday, says the land could accommodate a community of 32,000, and earn the city an extra $95 million in annual property taxes.

It has also fuelled a long-standing debate over what to do with the airport, just northwest of the city's downtown core.

"We'll listen to what people have to say and then we have to make a decision," Edmonton Mayor Stephen Mandel said Wednesday, mindful of the controversy over the issue.

Edmonton's City Centre Airport could be worth more closed than open suggested a new city report released this week. (CBC)

The airport, which began its life in 1929 as the first licensed airfield in Canada, grew to a thriving transportation facility in the mid-1990s, handling more than one million passengers.

But a series of hard-fought plebiscites in 1992 and 1995 led to the airport being closed to most scheduled traffic, and flights were moved to Edmonton International Airport, a 30-kilometre drive south of the city.

Mandel hopes the debate will focus on the future, not the past.

"Our job is to try to do the best job for the citizens of Edmonton [and] try to raise the greatest amount of revenue for the citizens of Edmonton in order to keep their taxes at a reasonable level."

The airport, which is limited to private, corporate and small commuter flights to northern Alberta, is only handling about 20,000 passengers a year, and council must decide if it's worth keeping the facility open, says the report.

"Personally I don't think that case can be made," said Coun. Ben Henderson, who represents the city's downtown.

"It's a large piece of property on which we can do a lot of things very close to the heart of the city. And as we talk about trying to create a more compact city, obviously it's an opportunity that we have to look at."

Supporters of airport vow to fight

Supporters of the airport say they will fight any plans to shut City Centre down. They insist the airport is a valuable asset.

"The airport has been here for decades and for it to be sacrificed simply because certain developers want to develop certain areas of downtown Edmonton seems like a huge loss for the City of Edmonton," said Mary Anne Stanway of the Kingsway Business Association, which represents businesses around the airport.

"If we could have a greater focus on making this airport work properly as an airport, bring cargo services back, develop charter services a little bit more ... we could have more employment and we could become more economically viable here in Edmonton."

City council plans to hold a public hearing in the fall before deciding whether to push ahead with closing the airport.

The city also would have to negotiate with Edmonton Airports, which operates the facility along with other local airports and has a lease for the next 46 years.