Edmonton is searching for options to provide daytime services to homeless people after councillors rejected a proposal for a new temporary shelter downtown.

City administration recommended contracting the Bissell Centre to operate a city-owned building at 105th Avenue and 105th Street as a drop-in centre from May 1 to Oct. 31.

The $4-million contract included providing essential services like food, clothing and hygiene, and basic health and housing information. The space would have accommodated 60 people at a time, adding to existing daytime shelter space downtown to allow for physical distancing during the COVID-19 pandemic.

Council's executive committee voted 3-2 against the proposal at a meeting on Monday.

Mayor Don Iveson and Coun. Michael Walters were in favour of the contract, with Sarah Hamilton, Tim Cartmell and Scott McKeen voting against it.

At the meeting, the committee heard from local business owners concerned about increased disorder if another shelter opened in the area.

McKeen said he couldn't support a drop-in centre in the area.

"The business community downtown and the neighbourhoods downtown are losing their empathy, and I hate to see that but I understand it," McKeen said in an interview Tuesday.

"They've dealt with enough issues now, break-ins and all sorts of other things. They're done. They can't handle this anymore."

Fadi Moukhaiber, who operates a cosmetic distribution company, said he would move his business if the city opened a facility in the area.

"Basically you're saying goodbye to the rest of the businesses," Moukhaiber told the committee.

He said he already finds needles and human waste in the back alley at 105th Avenue and 106th Street.

"The stuff we clean up from behind the building is mind boggling," Moukhaiber said. "It's just disgusting."

The committee approved two other contracts at existing centres, one at the Bissell Centre Community Space for $2.4 million and another with the Boyle Street Community Centre for $565,000.

Iveson voted in favour of all three contracts and said the city needs to provide daytime services with the Edmonton Convention centre set to close this weekend.

"I think we need to do something for folks who are coming out of the 24/7," Iveson said.

"The fact that we did not do that last year, I think, was a contributing factor to the growth of encampments. We cannot allow that to happen again this year."

Hope Mission will operate a replacement 24/7 shelter with about 150 beds at the Spectrum building on the Northlands site, but more day services will be required, the city said.

Iveson said leaving people who rely on those services to fend for themselves isn't safe or dignified.

He said he's open to exploring options to provide services, different from a fixed-base facility like the proposed one at 105th and 105th.

Administration is expected to report back to council next Monday on other options for the $4 million in funding.