November 20, 2001 11:00 pm

By Ray Linker

Observer Staff Writer

ODS Health Plans is negotiating with Safeway to purchase the grocery companys building and land at Fourth Street and Adams Avenue and turn it into a $6 million retail/office complex that would also house the city library.

ODS, which now has local offices a block away at the corner of Adams and Chestnut Street, wants to form a public-private partnership with the City of La Grande, the Oregon Employment Department and Eastern Oregon Net Inc.

The city would relocate the public library on Penn Avenue in a new building on the site, using 20,000 square feet of space.

ODS, which serves 750,000 clients statewide with medical and dental insurance benefits, wants to tear down the store and put up an office/library complex, either in one or two buildings, said La Grande City Manager Wes Hare. It could be one or two stories, he said.

If it will be one building, it will have 40,000 square feet of space and be constructed in an L or V shape, with one part facing Adams and the other facing Fourth, Hare said. Parking would be behind the building(s).

Safeway plans to vacate the building on Dec. 4 and be open for business the next day in its new store at Adams and Willow Street.

There is no definite timeline, but I hope that we can begin work quickly, Hare said. All partners will be getting together to discuss it. ODS has a design

consultant to see what each partner will require. But things are very preliminary at this point.

ODS has stressed it will be an attractive facility, aesthetically better.

Hare said Safeway was willing to sell the property and that ODS has the money to buy it.

ODS has 5,000 square feet of space at its present location and is talking about doubling its space, Hare said. That could mean additional employment for La Grande, Hare said.

EONI needs bigger quarters than what is now provided at its location across the street at 808 Adams Ave. Bob Nelson, the Employment Departments local manager, has said he wanted to move from his present building at 1901 Adams Ave., but wanted to remain in the downtown area to be accessible to clients.

The citys library commission, which has been searching for a new site for several years, previously said the Safeway site was one of its preferred locations for a new library.

Hare said Tuesday, The emphasis now is that this is a proposal, that the city has not spent any money on the project.

This is an idea. We dont have all the answers yet. We want to present the community with this concept and see how it reacts, the city manager said.

Before the council votes on this, it needs to hear from the community if the citizens feel this is an appropriate way to go.

The city council voted 6-1 in May to make an offer to Safeway on the site. The city was interested at that time in pursuing it for a library.

It wont be a cheap venture for the city, Hare said.

Im sure we could go out and find bare ground to build a library on and do it cheaper. But this plan would enable local businesses, a state agency and the city to work together. Were seeing a business (ODS) willing to invest in La Grande in terms of a new building big enough to provide for expansion of the work force.

ODS, which located an office in La Grande two years ago, employs more than 50 people in its claims processing and customer service center at Adams and Chestnut in a building owned by Verizon. ODS put $150,000 in improvements in that building, Hare said.

The proposed library would replace the 90-year-old Carnegie building at Penn Avenue and Fourth Street, which has about 8,000 square feet of space.

Hare said the city could finance its share of the project with reserved funds, grants and a large private bequest from an anonymous donor.

Its the citys intent to own our share of the building. It may be that in the short term, we will have to lease until we can get all our financing in place, Hare said.

While some merchants have said they wanted to see the Safeway site retained in retail businesses, Mayor Colleen Johnson described the proposed project as an important opportunity to improve the citys downtown by adding an attractive new building, new jobs and a 21st century library.

EONI, which performs computer and networking consulting and has a retail store, was formed six years ago to provide Internet service to the region and started a sister company, PriorityOne Telecommunications two years ago. The two companies employ 20 people.

Employment Department regional manager Nelson, who previously rejected the idea of moving to a planned building on Gekeler Lane, said locating his office next to the public library would help both job- seekers and library patrons.

We should be able to offer better access to current job information as well as training materials, Nelson said.