The City Council is considering a policy change meant to reduce office vacancy rates downtown as it begins its first steps of a new city center revitalization initiative.

The shift would come in the form of low-interest loans to help developers renovate and fill downtown office space.

City Manager Pat Hentges agreed with an estimate from Fisher Commercial Realtors that about 144,000 square feet of such space isn’t occupied — a 20 percent vacancy rate. He says that’s above the area average, but not out of line with what other city centers face.

The goal, he said, is to keep major employers downtown, especially given the widespread perception that jobs are following development near the edge of town.

An owner of the Northwestern Office Building told the council in a letter that his ownership group was “at an impasse” about ways to finance renovation. Their story, he wrote, is faced by many landlords in downtown Mankato.

Dozens of homes and business facades have been renovated using low-interest loans from the city, and this change could get developers and building owners in on the deal.

Hentges received a few questions, but little disagreement, from the council.

Councilman Joe Frederick asked, “At what point does it stop?”

Hentges responded that such subsidies would be “targeted” to the downtown area, which he says has investment needs different from the rest of the community. And each proposal would be analyzed for its particular merits.

Councilman Charlie Hurd, whose ward includes much of downtown, asked if there is “a way to make it more expensive to develop outside of town than to redevelop downtown,” citing the unacknowledged costs of urban sprawl.

The policy suggestion could come before the council during the next economic development authority meeting, at 6 p.m. on June 12 at the Intergovernmental Center.

It also came just after talks about beginning a revitalization effort in the downtown.

City staff have recommended that a 19-member task force be created next month to reflect the broad residential, commercial and governmental interests in the area. The group would hold a neighborhood meeting, create a plan and report back to the council, perhaps next January.

A pair of Envision 2020 leaders could join the task force, bringing initiatives from the more wide-ranging community planning process.

Shannon Robinson, coordinator of the Twin Rivers Center for the Arts and co-chair of an Envision 2020 committee, said culture is often a core element of downtown. She says that element is lacking in Mankato’s city center.