By Hiroko Sato
GROTON -- The Groton School is expected to soon start its $48 million construction project with the help of MassDevelopment in obtaining lower-interest loans.
MassDevelopment, the quasi-state economic-development agency, announced on Monday that it has issued a $75 million tax-exempt bond on behalf of the Groton School to help pay for the schoolhouse-expansion project. The project includes a 32,700-square-foot addition that will house new state-of-the-art science and math classrooms and labs as well as a "research-oriented" library, according to the school. The private, coeducational boarding school serves 369 students in eighth through 12th grades. Many of the existing classrooms will also be renovated.
Of the $75 million being financed through the bond, which was sold to San Francisco-based First Republic Bank, $25 million goes toward the construction project, including $15 million in temporary financing to be provided before the issuance of the bond. The agency and the school will use the rest, or $50 million, to help lower the cost of the school's existing loans.
"Groton School received excellent support from its longtime investment bank and adviser, George K. Baum, and selected a very flexible and attractive bank-direct placement package from First Republic Bank," Hale Smith, Groton School's chief financial officer, said in a press release. "The whole financing team worked collaboratively to produce a solution for Groton that both reduced risks and provided competitive, 20-year pricing."
The addition and renovation project -- which will break ground in March and is expected to be completed by fall 2015 -- will remove the existing 10,500-square-foot science wing, create new areas for socializing and collaborative work and reduce energy use. The iconic brick facade of the building, some historic rooms on the inside and many original classrooms will be preserved, according to the school.
The new addition, which will be dedicated to the science, technology, engineering and math education, will have classrooms that are flexible enough to modify their use over the years to come, according to school.
"The Schoolhouse renovation supports Groton's overarching aspiration: to be a place of inclusion, inspiration, and collaboration," Groton School Headmaster Temba Maqubela said in a statement. "The project takes a building that has had an iconic presence on Groton's Circle since 1899 and prepares it for the next 100 years. The renovation will integrate a new facility especially created for science, math, and technology; improve humanities classrooms; and create a communal forum that honors the sense of community on this close-knit campus," Maqubela continued. "I've been impressed with how carefully this project focuses on the future, while still preserving the architecturally significant spaces that distinguish the building as well as the student-centered ethos that distinguishes the school."
"Today's students need to learn and live in buildings with cutting-edge technologies," MassDevelopment President and CEO Marty Jones said in a press release. "MassDevelopment is pleased to leverage this low-cost financing on behalf of Groton School so that its students can thrive in an environment with classical architecture and current infrastructure."
MassDevelopment issues tax-exempt bonds to connect qualified borrowers that have certain types of projects with lenders who can offer lower-interest loans. Borrowers must be deemed eligible by the federal tax code, and they include nonprofits, manufacturers, affordable housing developers, solid waste and recycling companies among others, according to MassDevelopment. Eligible projects include real estate and equipment. The agency recently issued tax-exempt bonds on behalf of such educational institutions as Worcester Academy, Dorchester Collegiate Academy Charter School, and Deerfield Academy, as well as such human-service agencies as Arc of Greater Plymouth.
MassDevelopment said it financed and managed 350 projects during fiscal 2013, and those projects are expected to create more than 7,000 jobs. The school said it's too early to know exactly how many construction jobs the project will produce.
With an endowment of $330 million, Groton School is known for the academic excellence of the students, 87 percent of whom live on campus. While tuition and fees cost $41,960 for students commuting from home and $53,870 for boarding students, the school also provides financial assistance to 38 percent of its students with the grants averaging at $40,000 per student a year.
Founded by Endicott Peabody in 1884, the Groton School boasts a 410-acre campus along scenic Farmers Row. The existing schoolhouse was first built in 1899 and measures 100,500 square feet after some additions over the years.