Worthing Borough Council could strike a £3million deal with the owners of the former police station site in Union Place.
Cabinet members will debate a proposal on Wednesday which would see the council acquire the freehold of the site following a major redevelopment.
In return, the council would contribute the High Street surface car park and borrow up to £3million to bridge a viability gap.
Leader Dan Humphreys said: “Our desire to support this scheme shows that Worthing Borough Council is absolutely committed to driving forward regeneration in our town centre.
“Our ability to do this at a time when most other councils are cutting back on their services is further proof that our long-term strategy is the best one for Worthing and the people and businesses who live and work here.”
The latest proposal would run in parallel with a separate bid to the Government’s Local Growth Fund (LGF) bid, also lodged to address the viability gap.
But pursuing funds through the Public Works Loans Board would allow the council to commit now, rather than waiting until the autumn to hear the result of the bid.
A successful LGF bid would reduce the total borrowing cost.
Acquiring the freehold of the entire site, upon completion of the development, would increase the council’s potential revenue stream.
An initial draft scheme for the site includes a multiplex cinema, six large family restaurants and ‘high-quality’ apartments.
In reaction to the proposal Liberal Democrat deputy leader Bob Smytherman said: “We welcome the scheme and look forward to seeing the theatres’ future strategy if a multiplex cinema is to be included, as this will have a significant financial impact on our theatres which continue to struggle to keep within their budget.”
Mr Smytherman also asked whether similar proposals were possible at Teville Gate.