City councillors gave preliminary approval to the next steps in the construction of a new downtown arena, allowing administration to borrow millions to pay for the land, and begin the design process.

On Wednesday, city council agreed to borrow $56 million to purchase the land required for the arena, and to design the building.

The design money is part of the maximum $450 million cap set by the city and the Katz Group.

The city is planning to pay back their portion through lease payments from the Katz Group, ticket tax money, a portion of new property taxes in the area, and parking revenue.

However, the city has left a safety net.

In the last point of the bylaw, it states if there is any remaining deficiency, the city would raise municipal taxes enough to repay the outstanding debt.

Councillor Linda Sloan said that part of the bylaw is proof the taxpayer is paying for that loan.

"I think it's the first disclosure that in fact there is a reliance on taxes," Sloan said. "If we're not up front than there's going to be more in the future if the revenues associated with the arena developments don't meet the targets,

"I think citizens have to realize that if there is a backstop then that backstop is going to be the City of Edmonton taxpayers."

City administration has suggested the city agree to hire the architect and design consultant already chosen by the Katz Group.

A preliminary look at the design is expected in the spring.

With files from Bill Fortier