NASHVILLE — Hoping to boost the town’s revenue stream, town leaders are trying to find cost-effective ways to lure in more outside businesses to its greater downtown area.

Nashville Town Council members are discussing the possibilities of an incentive program for potential businesses interested in relocating to the downtown area. As council members continue to juggle with next fiscal year’s financial outlook, declining sales tax revenues are one of the areas projected to impact town finances. But many council members said they believe this move could spur more quality businesses, eventually drawing more pedestrians and shopping activity downtown.

Town Manager Preston Mitchell said the plan is designed to provide incentives for businesses to locate in the greater downtown area through construction of new downtown buildings or remodeling of current buildings. The program will key in on businesses located on the traditionally occupied areas on Washington Street, along with establishments surrounding Church Street, Alston Street and Barnes Street.

The proposed incentives would target two types of businesses — those above or below more than $500,000 in investments.

For investments greater than $50,000 up to $499,999, the town would provide incentive payments for planning fees, except advertising, and labor-related fees for water and sewer installation — up to 2’’ water line and 4’’ sewer line. But investments at $500,000 or more, the town would provide payments for all planning fees, including advertising, and water and sewer installation, which also are up to a 2’’ water line and 4’’ sewer line.

One hurdle that remains for the town is making sure the initiative falls in line with state general statues.

In a January memo to Mitchell and town council members, Town Attorney Elizabeth Fairman said the proposed program does not fit the description of a “downtown redevelopment project” because the town is not planning to acquire, sell or improve real property.

State Urban Redevelopment Laws also do not apply to this project, but could if the town decided to purchase real property, fix it up and resell it for public use, Fairman said. She said the project closely fits the statute section 160A-456. This gives Nashville the chance to spend money on community development projects aimed towards boosting economic development and employment.

Until then, Fairman suggested the town continue to explore the program’s costs and benefits, explore state funding and adopt guidelines for the program, ensuring equal opportunity for all potential businesses.

Mitchell said the plan regulates incentives based on investment only. This is because many of the downtown businesses do not employ a higher number of full-time workers with benefits, versus industrial development incentive projects, Mitchell said.

Town officials said they believe the proposed incentives would provide backing for the downtown redevelopment project, which is scheduled to start sometime in April. Mitchell said the plan has the potential to push forth other long-term benefits for the town, such as encouraging renovations amongst other existing businesses or new construction.