Right near the entrance, the building where you can jump up two metal balconies to get on the roof, near the glass pavilion covering the Arc Pylon (there is a upright roll of fabric with a health potion inside next to the lower balcony).

Using the outsider vision I can see lootable items inside but after putting all the Hatters and Eels in the area to sleep I can't find a way in.

Dang... I was just looking for that building yesterday!

You can find the key down at Draqer's Ward Sewer. Sewer's entrance is down in the basemant of the Mill, but you have to get a keycode. The key is right next to dead Hatter behind the bars at the first section of the sewers that you entered through. You can you Pull to get it, but you can also go through the giant round room and get to the dead Hatter.

If you haven't get down there yet... Ahh I won't say anything.

I'm in the sewers right now. Thing is I haven't even found a locked door in the building I mentioned. I'll go look again but it has been driving me crazy.