Edmonton city council has taken a step back on plans for Northlands Coliseum.

Councillors were expected Tuesday to move forward with a plan to sign a memorandum of understanding with Hockey Canada to transform the arena into a Hockey Centre of Excellence.

The proposal offered two scenarios: repurposing the coliseum into six sheets of ice, a training centre and classrooms, or, if that proved too costly, replacing the coliseum with a new facility.

Coun. Michael Walter said when the city voted years ago in favour of building a new downtown arena, councillors knew then the coliseum's fate would come back as a "point of tension."

There are risks to not making the building's future a priority, he said.

Mayor Don Iveson said Tuesday that the city may have to consider demolishing Northlands Coliseum. (Lydia Neufeld/CBC) "The notion of leaving it go dark is an option that we could choose," Walters said. "Just board it up and try and stop the financial monthly bleeding."

Mayor Don Iveson suggested the agreement with Hockey Canada be put on hold until council has heard from Northlands about its business plan at the end of June.

He also asked city staff to review the city's arena strategy to determine the options and timelines for dealing with aging single sheet facilities, including a scenario with a repurposed coliseum or newly-built multi-plex with partners that may or may not include Hockey Canada.

A report expected later this summer about the future of the entire Northlands site, as the racetrack is to be torn out, needs to be factored in, Iveson said.

I don't know what the nostalgia price point for people would be, a couple of million bucks maybe, to keep it? - Mayor Don Iveson

Iveson said the plan has always been that if Northlands is re-purposed into a multi-rink facility, at least six aging single-sheet arenas in the city would be torn down and the savings used to pay for the renovations.

"We can't be knocked off a sensible arena strategy for all of our amateur ice just because of a desire to keep this building."

It might have been worth it if the costs aligned, he said.

City staff told councillors preliminary numbers show refurbishing the coliseum will cost $150 million versus $120 million to tear it down and build from new.

Those costs are "plus or minus 50 per cent," said Adam Laughlin, deputy city manager of infrastructure.

Demolition of the coliseum may have to be considered, Iveson said.

"I don't know what the nostalgia price point for people would be, a couple of million bucks maybe, to keep it? Tens of millions of dollars, I don't think that's reasonable," he said.

Several councillors said they are not interested in mothballing the coliseum.

Coun. Bev Esslinger said if it turns out the city can't afford to use the arena for hockey, she would like to see the facility used in some other way.

"Perhaps the arts," she said.

City staff describe the coliseum as in average-to-good condition leading Coun. Michael Walters to ask about the wisdom in tearing it down.

"What does it say about us when we are so easily willing to demolish what's a fairly monumental structure?" he said.