City walk OK for tourists but locals not as thrilled.

In May 1993, Universal CityWalk opened as a shining experiment on a hill - a shopping/entertainment hybrid that became one of the first examples of a retail trend now called the "location-based entertainment" center.

As the mall enters its fifth year of operation. the concept seems to be working - sort of.

Which is to say that people are caring and going to the movies in droves, and the stores catering to tourists are doing a booming business. Butt the mall's appeal to locals remains limited.

"I know that the restaurants up there do very well, but the retail shops are hurting," said Dick Carter, senior retail associate with Beitler Commercial Realty Services. "Given that you have to pay $6 to park your car, and most of the merchandise up there isn't much different from what you'll find at your local mall, why pay that much just to go shopping?"

The high cost of parking, and a relative lack of unique entertainment offerings that would compel locals to keep coming back, are cited by analysts as the biggest drawbacks to an other wise highly successful venue.

Officials with Universal Studios Inc. say they are in the process of adding new attractions - including a Sega GameWorks arcade and a Marvel Comics-themed restaurant - in hopes of broadening the appeal.

"We want CityWalk to be a place where both locals and tourists arc comfortable in the context of each others' worlds," said Larry Kurzweil, a Universal senior vice president who is the mall's general manager. "We don't want it to be too tourist-themed, but we want it to have the things tourists are looking for."

CityWalk is Universal Studios Hollywood's equivalent of Disneyland's Main Street U.S.A., a retail and entertainment corridor through which theme park visitors must pass before reaching the main attractions - the studio theme park and the Universal Amphitheater.

The key difference between CityWalk and Main Street is that visitors don't have to visit the park or pay any kind of admission (except for parking) to patronize CityWalk.

Universal Studios Hollywood spokesman Eliot Sekular said that approximately 10 million people visited Universal City last year - and about half of those did not visit the studio theme park.

Merchants report mixed results in their four years at the mall. When asked whether sales have increased from year to year, responses range from "absolutely," to "sales seem to fluctuate with the tourist trade," to "sales have kind of died down since the first year CityWalk was open."

The range of responses seems keyed to one factor: Whether or not the store caters to tourists.

Claude Woods, assistant manager of the Nature Company store at CityWalk, reports a sales decline since 1993. He attributes the change to the high cost of parking and the fact that many locals stopped making return visits to CityWalk after the initial hype of its first year died down. The Nature Company is a 132-store chain of nature- and knowledge-oriented stores that aren't known as tourist stops.

But David Palley, manager of Captain Coconuts - a gift shop specializing in plush toys. caps, mugs and other tourist-oriented merchandise - thinks his store is in one of the best locations in the country.

"Tourist traffic here is unsurpassed," he said. "Probably one of the only better places to be would be Disneyland."

Restaurants appear to be an unqualified success. The mall's Gladstone's, for one, is among the top-grossing restaurants in L.A.

Also getting plenty of patronage from locals and tourists is the 18-screen Universal City Cinemas - the biggest movie theater in L.A. County in terms of the number of seats and is believed to be the county's top-grossing cinema as well.

Nonetheless, some retail analysts say City-Walk has failed to live up to its promise as both a retail and entertainment venue.

"The entertainment element up there has to be brought up a few levels, so you're taking it out of the realm of a gloried strip mall and making it (location-based entertainment site)," said Kevin Skislock, director of investment research at L.H Friend, Weinress, Frankson & Presson Inc. who specializes in location-based entertainment.

"There's clearly potential for the new management team to max that site out further, particularly on the entertainment side of the equation." he said.

Enter Kurzweil, the new mall manager who is intent on both increasing CityWalk's local appeal and turning up the volume on entertainment. Kurzweil, who has built brands for the Olive Garden restaurant chain and Nestle SA., says his primary duty is to boost awareness of the center, but he also emphasizes his intention to broaden the mix of offerings at CityWalk.

The mall's second phase, which has not yet begun, calls for development of about 100,000 situate feet at the east end of the existing 200,000-square-foot center. Universal officials say they don't have a date for construction to begin.

In addition, Universal is seeking approval for a $3 billion project that will more than double the developed land at Universal City - and add a considerable portion to CityWalk in addition to the already approved second phase.

Kurzweil is currently assessing the various options for new stores and attractions at the center, looking for things that will appeal to as wide a consumer base as possible.

At least one major entertainment offering is in the works. Sega GameWorks, a chain of themed video arcade/mini-theme parks being developed through a partnership between Universal, Sega Enterprises Ltd. and Dream-Works SKG, is expected to open an outlet in Universal City some time in 1998 - although no leases have yet been signed, according to Game-Works spokeswoman Melissa Schumer.

Meanwhile, a new sports bar/cigar club/grill called the Hollywood Gaming Grill opened over the past weekend. And Universal is teaming with Marvel Entertainment Group Inc. and Planet Hollywood Inc. to build the first Marvel Mania, a themed restaurant based on Marvel's comic book characters being constructed in a strategic location with entrances facing both CityWalk and Universal Studios Hollywood.