Hillsborough Prep School Using Muni Bonds for Makeover

A Bay Area prep school is turning to municipal bonds to redevelop the historic anchor property of its campus on the San Francisco Peninsula.

Crystal Springs Uplands School, located at 400 Uplands Drive in Hillsborough, is borrowing $26 million in muni bonds to revamp the Uplands Mansion, a century-old former home, Bloomberg reported.

The $26 million from the California Enterprise Development Authority will help pay for the nearly $50 million makeover of the mansion that has served as the school’s educational hub for nearly seven decades, according to Bloomberg.

“This is really modernizing all of our teaching spaces,” Brian Talbott, chief financial and operating officer of the school, told Bloomberg. “Classes were being taught in rooms that were formerly bedrooms, and we had offices in rooms that were clearly formerly bathrooms, including multiple spaces where bathtubs were still in the person’s office. So it was still very much a house.”

Built in 1917 for the grandson of railroad tycoon Charles Crocker, the Uplands Mansion features high-end touches like handmade marble fixtures from a 16th-century Italian castle. Crystal Springs acquired the mansion in 1956 as the first permanent location for the private school. It was originally founded as a girls’ school and went co-ed in 1977.

In the years since then, Crystal Springs has built various facilities including a gymnasium, theater and artificial turf field on the 10 acres of land surrounding the mansion. It also grew into a second campus for its middle school. Today, the Uplands Mansion is now the centerpiece of the upper school campus, hosting several classrooms, offices and meeting spaces as well as a library.

With the funding injection, the school will renovate the building to add a modernized robotics workshop, physics lab and elevator, as well as structural improvements like a new HVAC system.

The $26 million deal marks Crystal Springs’ first venture into the muni market for financing, having worked with private banks in the past to build its second location in Belmont. Other private schools similarly dove into the muni market last year after the 2023 banking crisis.

“We have a loan with First Citizens Bank, formerly Silicon Valley Bank, on our middle school campus here,” Talbott said. “As we started looking at our financing needs for the project at our upper school on the mansion, we explored essentially another loan with First Citizens as well as a debt offering.”

Naturally, the collapse of Silicon Valley Bank during the 2023 crisis made the school wary of working with a private bank again. “That did give pause, not just to us, but I imagine to many independent schools just because the market changed,” Talbott said. “Having different options made a lot of sense then and still makes sense to my mind.”

— Chris Malone Méndez