NEW YORK -- A ceremony with red, white and blue balloons, bags of jellybeans, speeches and a special press bus from City Hall was held in the South Bronx a few weeks ago for the fifth anniversary of Bathgate Industrial Park, a showcase for economic development in the slums.

Gov. Mario M. Cuomo sent a congratulatory message. Deputy Mayor Alair Townsend toured a pharmaceutical manufacturer and, recalling the devastated neighborhood before the park, declared, "This is a unique Bronx success story."

But beyond the 21-acre park on the Cross-Bronx Expressway, with its seven industrial tenants guarded by a private security force, lies a more sobering reality. In the 1970s, 40 percent of Bronx manufacturing jobs disappeared. Today, despite city claims of an "economic renaissance" in the South Bronx, the firms that have moved here have done so only with unprecedented subsidies; major development projects touted by the city for decades have yet to materialize and private bank branches are making few loans or moving out altogether.

Nonetheless, property values are rising. As the city demolishes more than 200 vacant apartment buildings a year over the objections of local housing groups, fears are growing that speculation, industrialization and gentrification will eventually force many South Bronx residents out, as has happened in Manhattan.

The $65 million Bathgate park is funded by $36.4 million from the Port Authority of New York and New Jersey, a quasi-governmental agency which runs bridges, airports and waterfront areas. The balance includes $5.7 million in city money, $9.1 million in federal funds and $14.6 million in private investment.

Another 10-acre development, the Mid-Bronx Industrial Park, is just beginning construction.

Bathgate tenants -- which include a hydroponic herb farm, a garment manufacturer, a factory for small aircraft engine parts and others -- employ 1,100 people. By contrast, Wedtech, the South Bronx defense contractor which went out bankrupt this summer after several of its officials pleaded guilty to paying bribes, laid off 1,200.Rebuilding: One Step Up, One Step Back

Indeed, a rhythm of one step forward, one step back has plagued economic development efforts here. While legislation against red-lining was passed in 1978, a 1985 study of the 13 bank branches in the South Bronx found continuing "massive disinvestment." Despite deposits of $1.5 billion from the community -- and an increase in deposits of 15 percent during the previous three years -- six of the 13 failed to grant a single residential mortgage, according to the study. The remaining seven granted a total of 27 mortgages, worth $3.2 million, in three years.

"Overall bank policy has not improved," said Getz Obstfeld, of the Banana Kelly Community Improvement Association, which conducted the study with the office of Rep. Robert Garcia (D-N.Y). The nonprofit group is named after the curving shape of Kelly Street.

In the last two years, Manufacturers Hanover has closed four of its six South Bronx branches. This year, Chase Manhattan closed its two branches. During the same period, one new branch bank was opened by New York National Bank.

William Burgos, 59, who owns of a hardware store and an apartment building in the South Bronx, said he tried to get a mortgage to install new windows and a new boiler in his apartment building. Both Chemical Bank, where he has an account, and National Bank rejected his application on the grounds that his building does not show a profit. "It doesn't show a profit," Burgos said, "because the money I get from rents, I have to put back in the building." Financing: Skepticism From Lenders

At Bathgate, Rafael Collado, president of Protocom, a computer company that has been highly publicized as a model, told Inc. Magazine two years ago, "We're trying to build a Silicon Valley in the South Bronx."

But now, he has second thoughts. "It's a hassle to do business in the South Bronx," he said. "The city doesn't have a comprehensive program for economic development here. . . . Banks have lent money hand over fist to Latin America and yet they tell us, 'You're not credit-worthy.' "

Like other Bathgate tenants, Protocom had the Port Authority erect a new building according to its specifications, then received reduced rent, tax breaks, loans for new equipment and large cuts in electrical bills. But today, the 42,000-square-foot facility is 80 percent empty, the company laid off 45 of its 75 workers, and business fell two-thirds from a high of $2.8 million in 1985.

Collado attributes the problems to "undercapitalization." When he moved from Greenwich, Conn., he said, "The venture-capital guys on Wall Street said, 'You guys are moving to the South Bronx -- you must have some screws loose.' " Finally, he said, Protocom obtained a bank loan after Manufacturers Hanover "saw us on television."

Three other major projects, announced with great fanfare, have yet to break ground: a $20 million industrial park to be sponsored by the Italian conglomerate, IRI; a $20 million truck stop with hotel and restaurant facilities to serve the city's wholesale produce market at Hunts Point; a $5 million shopping mall for a site cleared by the city 11 years ago at 156th Street and Third Avenue.

A $59 million office and retail complex on Fordham Road, on the edge of the South Bronx, opened last October, but only five of the 13 floors are occupied, all by government agencies.

Steve Karsh, a vice president of Sloan's supermarket chain, however, is bidding on the Third Avenue site and sees "revitalization" coming to the South Bronx. "Manhattan is history for the middle-income person," he said. "Middle-income minority people are going to go to the South Bronx."

But Alberto Urbina, president of Community Board 1, which has tried to develop the site for years, said "too much politics and too many restrictions on developers" have strangled the area. "Everybody in the Bronx is an economic development expert," he said. "They sit and talk, but it doesn't spill over into the street."Special correspondent Marianne Yen contributed to this report.