The key is located in Shanty Town in the Graveyard Shift Bar.

Enter the bar: (sign above says "Welcome to the Graveyard Shift")



Take the door on the far end to the right:



Go down the stairs to the basement and pick up the keys, on one of the barrels in the corner opposite the guitar:



Enter the Bull House Impound



Inside the Bullhouse Impound climb the stairs to the second floor:



Enter this room:



Near the drawers there is an entrance to the room with a chest:



Find the chest near the table: