Standing-Room-Only Crowd Urges KPFD to End Gas Station Deal; Board Votes to Counteroffer

If there were a fire code for frustration, the July 28 Key Peninsula Fire District 16 Board of Commissioners meeting may have tested it.

The standing-room-only crowd — the largest to attend a board meeting, according to Chairman Randy Takehara — packed the room at KPFD headquarters to ask commissioners to walk away from the proposed sale of the former Calahan property in Key Center to developer John Park, owner of Taechang, LLC of Gig Harbor, who plans to develop it into a gas station and convenience store.

Instead, after a 30-minute executive session with the district’s real estate broker, commissioners voted 3-2 to reject Park’s latest offer and return a counteroffer designed to force Park to move forward quickly or quit the deal. Commissioners Shawn Jensen and Colleen Mullen cast the dissenting votes.

The district did not set a deadline for Park’s response, but the answer is likely to be discussed at the next board meeting Aug. 11.

The revised proposal lowers the purchase price from $1.05 million to $1.025 million, but will require Park to assume responsibility for an estimated $25,000 septic repair — a wash on paper, but one that shifts the risk of a potential cost overrun to the buyer. It also shortens the feasibility period from 90 days to 60, with a single 30-day extension instead of four, and increases the nonrefundable earnest money from $10,000 to $20,000, due within three days of Park signing the contract. It would also eliminate his ability to transfer, or “assign,” the contract to another entity without the district’s approval.

The changes reflect a board continuing its work on an earlier deal with Park that unraveled this winter, when the buyer failed to deposit earnest money and communication with the district largely stopped.

“I have a lot of misgivings about the deal,” Commissioner John Pat Kelly said during the meeting. “But I’m ready to move forward. I really want to get this sale behind the district.”

Jensen told KP News he voted against the counteroffer because he was skeptical of both the buyer and his plans for the property.

(Go here for background on the district's real estate transactions.) 

The 5 p.m. meeting took an awkward turn almost immediately when commissioners switched their executive session from the end of the original agenda to near the top, at 5:15 p.m.

“We’re going to move the executive session up to now,” Takehara said. “This will be under RCW 42.30.110(1)(c) to consider the minimum price to which real estate will be offered for sale or lease when public knowledge regarding such consideration could cause a likelihood of decrease of price; however, final consideration will be done in open public meeting.”

The commissioners left the meeting amid vociferous complaints from the audience of 70 or more residents (and another 20 watching on Zoom).

“You’re not even going to listen to us?”

“So much for transparency.”

“This is chickens**t! It is!”

The 30-minute pause had the unintended effect of creating an impromptu community meeting, allowing audience members to engage with each other in a way not possible during a formal commissioners’ meeting, and to hone their arguments.

When the meeting reconvened, with no decisions made, public comment focused less on the purchase price than on what many saw as a once-in-a-generation decision for the heart of Key Center. Speaker after speaker urged commissioners to reject a gas station and convenience store, arguing that the prominent corner should instead become something that serves the community — a library, public gathering place, daycare, or some other civic purpose.

“Think very hard about what your legacy will be,” said Sarah Anderson, co-owner of the Madrona Café and a member of the Key Commons Working Group advocating for alternatives for the property. “Will it be a generational front porch, community-facing space, something that when you drive into Key Center, makes you smile?”

Anne Junod, an environmental scientist who lives in Glencove, said she had concerns about both the sale and the prospect of using the proceeds to buy a new fire engine instead of paying down the property loan. (See sidebar on fire apparatus.)

“The property was originally purchased for a public good, and to hand it over to a private company that will convert it into a multi-generational environmental disamenity is a smack in the face, to say the least. But to then use those funds to make a new capital purchase instead of paying off the original bond raises real concerns about financial mismanagement and would really be a wild move before coming back to us next year to pass another levy.”

Others criticized the board for giving Park another opportunity after the previous deal collapsed.

Lakebay resident Alyssa Johnstone, who previously submitted what some commissioners called an “informal” offer to develop a childcare center, accused the district of mischaracterizing her offer rather than rejecting it on price.

“You did not decline my offer based on price,” Johnstone said. “You declined my offer based on validity, and that was a lie. My integrity was questioned. For what purpose? Because you didn’t like the price that I offered? I also applied for a grant from the Washington State Department of Commerce to purchase this building for the asking price that you guys have it listed for right now. My grant was declined solely because the market value of the property does not match the asking price.”

Not everyone opposed the development.

Barb Rowland, who lives just south of Key Center, said, “I really don’t care what goes in over there, as long as it makes money and pays taxes. If it’s a park, we get nothing. We’ve got what, six or seven parks? … If you’re going to do something, do something that we don’t already have.” (See sidebar on taxes.)

The commissioners did not respond to the public comments, but Kelly addressed one concern.

He said the district’s existing debt on the two Key Center properties carries an interest rate of about 1.8% through 2040. Using proceeds from the sale of the Calahan property for a new fire engine, which could cost as much as $1 million, rather than retiring that low-interest debt, could save taxpayers money by avoiding a higher-interest loan for a replacement engine.

“We have to do whatever saves the most money,” Kelly said. “I cannot see paying more money for financing a fire engine when we have a different way available.”