soon have a second life if officials can persuade banks to invest in it.

New York Business Development Corp. is asking banks to buy shares in its new affiliate, Statewide Zone Capital Corp., which is raising money to make loans in state-designated economic development zones.

In return for their cash, investors will receive a state tax credit worth 25% of what they give, up to $100,000, and a dividend. Banks will also be entitled to Community Reinvestment Act credit. Organizers have taken in about $20 million, from 20 banks. The goal is to raise $100 million.

The tax credits were originally earmarked for businesses operating in development zones. In 1993, the state legislature authorized the credits and offered them to local zone boards to give to companies, but most of those credits went unused. Apparently, a tax break was not enough to persuade businesses to locate in blighted areas.

By targeting banks, New York Business Development hopes to raise enough money to offer low-rate business loans. They hope that the loans will be a better carrot than the tax credits.

Robert W. Lazar, president and chief executive officer of New York Business Development, said Statewide intends to partner with banks when making the loans. Statewide will finance no more than 50% of the loan, at a fixed rate no higher than 7.5%, he said.

Mr. Lazar said his group may eventually have to look beyond banks to insurers and Fortune 500 companies to raise the full $100 million. But banks are the most logical investors, he said. "We can offer banks CRA credits, which should make this worth more to them than to other companies," he said.

Bankers say the CRA credits were the key to their interest. Thomas F. Goldrick Jr., whose bank, State Bank of Long Island in Jericho, pledged $400,000, said it is a challenge to find investments that qualify under CRA.

"There are simply not always investments available in our communities that count towards CRA," said Mr. Goldrick, president and chief executive officer.

The $900 million-asset bank is spreading its donation out over two years.

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