Fire Commissioners Defend Real Estate Deal, Consider Plans for Development

If the community is in an uproar about this real estate deal, tell them to go look at some of the other training facilities and headquarter stations of other small, rural fire departments.”

At its biweekly meeting Jan. 11, the Key Peninsula Fire District board of commissioners heard a proposal for development of the $2.125 million worth of Key Center real estate it purchased in November and December and fielded questions from the public about the price and the plan.

David Fergus of the Bremerton architecture firm Rice, Fergus, Miller presented what he called an interim capital improvement plan for KPFD, incorporating research on existing facilities and the new properties with input from the district about its administrative and service space needs. Ideas ranged from remodeling to rebuilding one or more stations, to building a new headquarters, meeting rooms and fire training facility on the newly acquired Key Center properties.

The presentation can be read on the KPFD website at www.keypeninsulafire.org under the board packet folder tab.

Commission Chair Stan Moffett said the commissioners would study the options and consult with the community before deciding what to price out. “We’ll be developing some town meetings both by Zoom and hopefully live (where) people can let us know what their opinions are.” He estimated the planning process would take at least six months.

Some persistent questions about the decision to buy the real estate raised at earlier board meetings came up again Jan. 11.

The purchases include the Olson estate property, consisting of two parcels located almost immediately across KP Highway from the current fire headquarters, with a residence and a portion of the pasture behind it totaling 2.8 acres, and the Calahan property, site of the former O’Callahan’s restaurant (aka Reed’s and Buck’s) located at the corner of KP Highway and 92nd Street NW.

The Olson parcels were appraised at $460,000; the department bought them for $1.2 million on Dec. 15.

The Calahan property was not appraised or inspected, but the Pierce County Assessor-Treasurer tax valuation was $473,600. The department paid $950,00 for it Nov. 8.

In an interview with KP News before the meeting, Moffett said the purchase prices were close to the asking prices. “We felt these properties, in our estimation, fit the bill so well to what we feel the district needs, that’s why we offered what we did.”

“I’ve had this conversation with a number of people,” he said: “ ‘Why are you tying up this prime real estate in Key Center?’ Our feeling is the district needs to be within Key Center because the district is such an integral part of the community for safety and health services. With us freeing up the current station, that would free up that property, which is right on the highway and right in downtown Key Center, if you will.”

At the meeting, volunteer firefighter Lt. Dave Vezzani said he could not understand why the department would pay double the appraised or assessed values for the properties and called for the resignations of the entire board of fire commissioners.

The commissioners declined the invitation, and Commissioner Shawn Jensen responded by saying “The feeling of the board, at least in my opinion, was that these properties are available, they’re not getting any cheaper, if we’re looking to stay in Key Center the best thing to do is to secure them now, knowing that we’re in a capital facilities process that’s several years down the road.”

“Nearly all of the negotiations were handled by Chief Morrow, and we were presented with ‘this is the property, this is the price, do we agree, yes or no,’ ” he said. “The board agreed yes, this is the price we are willing to pay.”

Fire Chief Dustin Morrow left the department Dec. 1 to become chief of Central Pierce Fire & Rescue.

One career firefighter who spoke to KP News on condition of anonymity, said “Dustin is a very strategic, manipulative chess player in business, and that’s what makes him successful and a good fire chief administratively. His real estate plan was very strategic and purposeful and very much needed. If the community is in an uproar about this real estate deal, tell them to go look at some of the other training facilities and headquarter stations of other small, rural fire departments.”

KP News incorrectly reported in January that the parcels would remain on the county property tax rolls, quoting Moffett to that effect (see “KPFD Buys Second Key Center Real Estate Parcel,” Jan. 2022). But a subsequent examination of assessment records indicated zero tax liability on the parcels because taxing districts, like KPFD 16, do not pay property tax. Other exempt organizations include schools, churches, hospitals and certain nonprofits, according to the Department of Revenue.

The 2021 tax liability for the two parcels in the Olson estate was $5,334.48. Tax on the Calahan property for 2021 was $5,787.56, according to the assessor-treasurer’s office.

Moffett said later he did not intend to provide incorrect information. KPFD does pay county fees, such as for waste water management and noxious weed control, but no local or state tax, he said. The district paid $1,114.69 in fees for tax year 2021 on its headquarters, which was assessed at $565,400.

The department financed the two purchases of the three parcels by issuing a private bond for $2.125 million. “We’re paying 1.82% with no prepayment penalty, which is just amazing,” Moffett said.

According to the bond terms, biannual debt service is interest only, starting at $13,106.53 on Dec. 1, 2021, until Dec. 1, 2024, when principal and interest payments starting at $129,337.50 will become payable every six months until 2040.

The commissioners anticipate paying at least part of the debt through rental income from the residence and the restaurant. The properties will be managed by a rental agent for the department until decisions are made about what if anything to build on the sites.

“Again, if we decide we don’t want to do anything with the property, we sell it and pay back the bond,” Moffett said. “We’ve got a lot of possibilities.”