The purchaser was logger and Civil War veteran Horace Knapp (born March 23, 1845, in Titusville, Pennsylvania; died February 1, 1913, in Gig Harbor, Washington), who subdivided the land into lots and blocks to form the town of Purdy.

[10] A mill was built in 1885 by James Ashton, Joseph Purdy, William Rowland, and a Mr. Sherman on a small inlet of Burley Lagoon just down the hill from present day Peninsula High School.

[6] In 1886, the Purdy mill secured its first contract to provide huge lumber with one edge beveled for the construction of a wooden dry dock at Puget Sound Naval Shipyard in nearby Bremerton.

[6] The mill's success brought such conveniences as a grocery store and a post office to the area,[7] the latter sited on Knapp's floating camp from 1886 to 1895 after which the function transferred to Springfield (Wauna, Washington).

[7] Mr Ouellette, known as "the Frenchman", began canning native Olympia oysters gathered from his land on the Purdy spit around 1900.