Biotechnology giant Merck is closing down a research facility in Seattle's South Lake Union neighborhood, a blow to city leaders' plans to turn the neighborhood into a biotechnology center.

About 300 to 350 people will be affected when the facility closes by the end of 2009, according to an employee in Seattle. A large percentage of employees will be offered positions at a facility in Boston, he said.

In 2003, Seattle Mayor Greg Nickels touted a plan to create up to 20,000 jobs in Seattle's growing South Lake Union neighborhood, though reporting by The Stranger noted that the number appeared to "come straight from an Enron math book."

Losing 300 or more jobs in the neighborhood certainly is a setback for the mayor and Microsoft co-founder Paul Allen, who has vast real estate holdings in the area.

In total, Merck is cutting about 7,200 positions over the next three years and closing other research facilities in Tsukuba, Japan and Pomezia, Italy.

In 2001, Merck gained a presence in Seattle after purchasing Rosetta Inpharmatics for about $620 million. A few months before it was acquired, Rosetta completed an initial public offering valued at $100 million.

The closure of the Rosetta facility is the latest blow to Seattle's life science industry, which has lost a number of jobs in recent months as companies such as Northstar Neuroscience, Amgen and ZymoGenetics have scaled back.