KPFD Rejects Daycare Proposal as Sale Questions Mount

The Key Peninsula Fire District board of fire commissioners unanimously voted May 12 to reject daycare proprietor Alyssa Johnstone’s latest offer to purchase the district’s Calahan property in Key Center for a reported $750,000. The vote marked the second time commissioners turned down an offer from Johnstone, who planned to open an early learning center at the location.

Some commissioners later characterized the proposal as “impromptu” and “informal,” raising questions about the status of the offer. The debate soon expanded beyond the proposal itself into a broader discussion about how the district is handling the sale process and communicating with prospective buyers.

Johnstone first approached the district in early 2024 with plans to convert the former O’Callahan’s restaurant building at the corner of the KP Highway and Olson Drive NW into a childcare center, arguing the Key Peninsula has a shortage of childcare options. Commissioners rejected her earlier proposal over price. This winter, Johnstone returned with a higher offer.

During recent meetings, questions surfaced over other offers, potential buyers, and who should be involved in negotiating the sale of the property.

Although Commissioner John Pat Kelly voted to reject Johnstone’s offer, he had urged the district to move quickly at the April 28 board meeting.

“We need to divest immediately from the property,” he said, later calling it “a money pit.”

But talks increasingly shifted away from the property itself and toward how information surrounding offers was being handled.

Commissioner Colleen Mullen challenged whether commissioners should be directly involved in handling any offers tied to the property sale.

“We’re not professionals at it, nor should we be negotiating it,” she said. “I think we should have a realtor or an attorney that specializes in real estate.”

Public comments echoed similar concerns.

“The board should not be picking winners and losers in real estate transactions,” one speaker told commissioners at the April 28 meeting.

Those concerns emerged again following the May 12 vote when Johnstone disputed statements made during previous meetings about whether her proposal had been submitted through proper channels and pushed back on suggestions that it wasn’t a formal offer. She told KP News that her offer had been drafted by an attorney specializing in commercial real estate and argued it exceeded fair market value based on an independent assessment of the property.

“I wish the correct verbiage was used (by the commissioners) because it gives the impression that my credibility is being questioned,” Johnstone said.

She showed documentation to the commissioners during the meeting that her proposal had been sent directly to the district’s real estate agent.

“Some of the commissioners had not received the information that there was even an active offer on the table,” she said.

Her point was underscored earlier in the same meeting, when Board Chair Randy Takehara needed to ask Commissioner Stan Moffett whether any other offers existed for the property. Moffet and Commissioner Shawn Jensen are working with the district’s real estate agency on the sale. With Johnstone’s offer now rejected, another could emerge from a local working group that has spent months exploring community-oriented development ideas with potential partners. While the group has presented concepts to commissioners, members previously said they would not submit a formal offer until Johnstone’s proposal had been decided. Johnstone said she’s “re-evaluating the project and considering our next steps.”

Controversy surrounding the Calahan property has persisted for years.

The district purchased the property in 2021 as part of a broader land acquisition intended to support a future headquarters, training facility, and medical clinic. Plans for a clinic later faded, and commissioners voted last year to formally put the property up for sale.

The district appeared close to a sale earlier this year after entering into an agreement with Gig Harbor developer John Park and Taechang LLC for $1.5 million, but that deal fell apart.

With questions surrounding the property still unresolved, residents will have an opportunity to weigh in and discuss the district’s plans during a town hall meeting June 9 at Station 46 in Key Center immediately following the regularly scheduled board meeting, which starts at 5 p.m.