Proponents of the proposed Saskatoon downtown arena say it wouldn't only be valuable for sports fans and concertgoers — it could also be a boon for local business.

City council voted unanimously on Wednesday to choose the parking lot north of the Midtown shopping centre for the location of the proposed arena and entertainment district.

"We're really excited about it bringing more people to downtown and creating a central hub," said Madline Conn, owner of High Key Brewing, which recently opened a new location on the corner of First Avenue and 23rd Street.

City administration recommended the parking lot to council over the city yards in the north downtown area.

Residents also seem to prefer the Midtown location. According to a city survey, 63 per cent of respondents listed the site's proximity to amenities such as restaurants and bars as a key opportunity.

"I think it's really handy to be right next door to hotels. Obviously there's a lot of restaurants downtown, a lot of bars. The easier it is to walk from where you're staying to where you're eating to where you're seeing a show or a sports game, the better," Conn said.

Mitch Lupichuk, the founder of the Capitol Music Club on 23rd Street, also said the walkability will benefit his business.

"We've been a destination for nine years now. It would be nice to have walk-by traffic," he said.

Dean Dodge, CEO of the YMCA in Saskatoon, said the project has both short- and long-term benefits.

"The short-term benefits will be construction and those sort of jobs, and then longer-term I think the businesses around the area, including the YMCA, will benefit from a more vibrant workplace, more vibrant atmosphere," he said.

The Greater Saskatoon Chamber of Commerce said the arena also has the potential to make downtown a safer place.

"With more people coming to the downtown core and having events animate that space more nights of the week, including weekends, it does contribute to safety and downtown vitality," said CEO Jason Aebig.

The city will buy the north parking lot from Midtown Plaza Inc., at a price tag of around $25 million. The money will come from the city's property realized reserve, which is funded by city land sales, not property taxes.

The city still doesn't know how much the arena and entertainment district would cost. Councillors said on Wednesday that their constituents are concerned that their property taxes will go up.

Several councillors said they would not support any property tax hikes.

Mayor Charlie Clark told reporters he "absolutely would want to see" a project that doesn't rely on property taxes.

"The only way we'll know that is to be able to actually develop the costs. And the only way we'll be able to develop the cost is to know the location. So this decision gets us the clarity on where it's going to be so we can do the design," he said.

Aebig said it's important for a wide cross-section of businesses to be consulted about things like facility development and design.

"It's really important that we get this decision right. It's a once-in-a-generation opportunity," he said.

"We want to make sure that all of the businesses that are going to be affected positively and potentially negatively are part of the process."

City administration said preliminary capital cost estimates and a preliminary funding strategy would be in place by the summer.

By this time next year, city staff expect to have a detailed funding package, according to Dan Willems, the city's director of technical services.