A city report released Thursday shows the proposed area where a levy could be implemented to help pay for a new arena. Already, critics are sounding off about the arbitrary nature of the zone and the risks inherent in the funding model.

Administrators believe major development could happen in a region that spans from 109th Street to 97th Street and from 102nd Avenue to 106th Avenue, with increased taxes paying back an initial $160 million investment within 20 years.

"The important thing to remember about a community revitalization zone is that the primary purpose is to actually encourage revitalization in an area," said the city's Chief Financial Officer Lorna Rosen.

"If we can develop the downtown arena and it has the positive impacts that we believe it should, then this is the area we believe would be most positively impacted by that infrastructure."

The so-called Community Revitalization Levy (CRL) would not affect existing taxes inside the zone or the level of taxes charged. According to the model, the arena would instead generate money by spurring developers to build their facilities close to the entertainment and sports complex.

"I think the arena is a catalyst because you hear people saying, ‘if that gets built, then I'll go ahead and build this,'" said Mayor Stephen Mandel.

"We're hearing from a lot of people that if it goes ahead there's lots of condominiums people want to build, people want to be close to the facility, etcetera, etcetera. So I think one could legitimately say it has merit."

But the Canadian Taxpayers Federation disagrees, arguing the City can't prove any future development in the zone would happen because of the arena. Officials with the group say this shows taxes used to pay off the rink are being redirected away from other city services.

"It's been done so the city can make its phony math look like it's free money paying for the arena," said Scott Hennig. "Who pays for their share of the police and fire and the roadway clearing? That means everyone else."

According to the report, the City's Chief Economist believes new development will occur because employment and population are projected to grow at the same rate or a better rate than the national average through to 2020.

But the document also states downtown's current vacancy rate stands at 9.5 per cent, and one councillor argues that shows there's a danger new development won't happen, leaving taxpayers across Edmonton saddled with debt.

"A CRL is assumptions – it's all hypothetical whether development would occur and it's a very high risk factor," argued Tony Caterina. "If that development doesn't occur, you're out that money."

The Mayor counters that argument by saying the city's already ahead by $9 million, taking away some of the danger.

"We won't have to subsidize Northlands $2.4 million. We won't have put $3 million in the capital over there. There's $2 million we generated from taxes from the building itself, and plus there's about $2 million in savings from some other things as a result of this building being built," argued Mandel.

Furthermore, the authors of the document suggest after the initial investment is paid off, the area would generate $30 million per year for public coffers.

"If we pay off the arena in the 20-year span, then for the next 20 or 30 or 40 years or whatever number of years, those buildings from the city, we're going to get the revenue from it," said Mandel.

At present, the arena is projected to cost $450 million. The owner of the Edmonton Oilers has committed $100 million toward construction, and the city believes $125 million can be generated through a ticket tax and another $125 million through a CRL.

At this point it's still unclear who would cover the remaining $100 million, as well as cost overruns.

City administrators say they are getting closer to bridging the gap, but would not elaborate on details. They say extra funds may be found by hiking the proposed ticket tax from seven to nine-and-a-half per cent.

Mayor Stephen Mandel hopes the city can approve the project in some during a meeting on April 6th, arguing there's enough information on the table and it's time to make a decision.

For more information on how a CRL operates, click here or watch the video down below. Both sources are supplied by the City of Edmonton.

With Files from Scott Roberts