[@Little Bird]

I think that's where I got confused, I also haven't played KH1 in a long, long time so kinda forgot where it was, so in this case had intended this to be more or less just a shop he runs, rather than his actual home, and then it got mixed into being both his home and shop- and I never actually said it was in the First District so people who remember the game better than me assumed third district. 

A simple quick fix could be just that Merlin, Lucian, and Morgan are currently in the shop in the First District... and the others are at Merlin's house in the Third District, and there's some sort of magical transportation connecting the two, like a Harry Potter fireplace thingy.