The City Council agreed Wednesday to help the Oakwood School secure financing to construct a multipurpose building by lending the city's name to the nonprofit campus to sell bonds.
The new school building, expected to cost at least $6 million, will have underground parking, a gymnasium and locker rooms, a dance studio and a music center on a site across the street from the Magnolia Street campus.
Construction is expected to begin this summer, and the building would be open in 1999.
Officials said one benefit of the school's using its nonprofit status to secure the bond money, rather than taking out a commercial loan, is a low interest rate.
"We examined all types of financing and we found this to be a very reasonable approach and one that I believe is becoming more prevalent," said Sam Anker, chief operations officer for Oakwood.
Although the council agreed to enable the school to sell the bonds, the city will have no financial responsibility for them, said Scott Gorzeman, vice president of BancAmerica Robertson Stephens, which is expected to sell the bonds.
With the addition of the 55,000-square-foot building, the secondary school will be able to offer many extracurricular and arts programs that normally are conducted off campus.
The last major addition to the K-12 private school was the construction of a math and science building in 1994, officials said.