Lawrence economic development leaders were hailing a multimillion-dollar victory that they believe will make the city a major player in the bioscience industry.

A key committee of the Kansas Bioscience Authority on Thursday recommended investing $3.25 million into a proposed bioscience incubator facility on Kansas University’s West Campus.

“I think we’re going to have some very exciting companies locate here because of this facility,” said Mayor Mike Dever.

Thursday’s recommendation was a key hurdle for the proposed 20,000-square-foot facility that would be built near KU’s Multidisciplinary Research Building, the KU’s Structural Biology Center and the proposed site for a new pharmacy school building.

The building is designed to provide office space and lab space for promising startup companies in the life sciences field. Primarily, the center would hope to serve companies that are spun off from research conducted at KU.

Local leaders have long lamented that several drug-development companies that use research conducted at KU have moved to Johnson County or other locations. The companies typically employ scientists and other white-collar professionals that make higher-than-average wages.

“I think those companies would feel a loyalty to the community where they began, if we had a place for them,” Dever said.

The incubator deal must still win final approval from the full board of the Kansas Bioscience Authority, but Thursday’s recommendation was considered key to winning the board’s support. The full board likely will discuss the project in March.

The $3.25 million in funding would be in addition to $4 million in funding that local groups have committed to provide to the project during a 10-year period. The city and county both have agreed to provide $75,000 per year for 10 years for the project. KU would provide the land for the incubator and $1.5 million in cash during a three-to-five year period. The Lawrence-Douglas County Bioscience Authority would provide $500,000.

Originally, the local groups had sought $4 million in funding from the state bioscience authority.

But Laverne Epp, chair of the local bioscience authority, said the $3.25 million funding amount would be enough to allow the project to proceed.

Dever said he also was optimistic that the city would remain true to its annual financial commitment to the project, despite the tight budgets the city is facing.

Epp said if the KBA board gives final approval in March, construction on the building could start early this summer. The facility could be operational in spring 2010.

The building, which would be owned by the local bioscience authority, also would serve as the home of the nonprofit Lawrence Regional Technology Center. That organization provides business planning and management services for startup technology companies.

“That’s really what is going to set us apart,” Epp said. “The key to our model is that we’re also going to be able to provide the business development services for those companies.”