SUNDANCE-BY-THE-SEA : INDEPENDENT FILMS TO BASK IN L.A. FESTIVAL'S SPOTLIGHT.

Byline: Amy Dawes Daily News Film Writer

Sundance-by-the-Sea? Maybe not yet. But give the fledgling Los Angeles Independent Film Festival a few more years, and the moniker - coined by Oscar host Billy Crystal to describe this year's indie-dominated Academy Awards ceremony - is likely to catch on.

``I think this is becoming the next breakout festival for independent films in North America,'' said veteran producer's representative Jonathan Dana, who brokered the $10 million sale of ``The Spitfire Grill'' at Sundance in 1996.

``Clearly Sundance and Toronto are the premiere festivals as they relate to the buying and selling of movies, but LAIFF will take its place as the third stop on the tour.''

The festival, now in its third year and open to the public, begins tonight at the Directors Guild in Hollywood and runs through Monday, with most screenings taking place at Raleigh and Paramount Studios.

Consider the fate of ``Little City,'' an offbeat romantic comedy set in San Francisco that stars Jon Bon Jovi, Josh Charles, Joanna Going and Penelope Ann Miller. Shortly after it was announced as LAIFF's opening night premiere, Miramax movie executives snapped it up for a reported $2.8 million - a major acquisition by the standards of any film festival.

``They knew that everyone involved in acquisitions would see it at the LAIFF, and that a bidding war could have developed,'' said Beau Flynn, one of the movie's producers.

If the festival's strong lineup - which includes 16 world premieres - and past track record are any indication, ``Little City'' won't be the only project to leave LAIFF with a deal. Approximately 60 percent of the features that premiered during the festival's first two years have been acquired for theatrical distribution - a tribute to the event's canny position on the festival calendar slot and growing interest among film buyers.

``We picked this April slot because it puts us in position to scoop up the films that miss the deadline for Sundance,'' said Robert Faust, the festival director. ``Toronto comes in October, so we're right in the middle.''

According to Faust, submissions for 1997 rose more than 30 percent from last year, to include 400 full-length features and documentaries and 600 shorts.

``My guess is that at least half of these films were never seen by Sundance, and half of them were passed over,'' said Jeff Dowd, a producer's representative and longtime festgoer who is representing the world premiere movie ``Ocean Tribe'' about four friends that journey to Mexico to take a dying buddy on one last surfing expedition.

Interest from film buyers has been building steadily. ``Just about all of our screenings are already sold out, and I'm getting a lot of calls from acquisitions people asking me to get them in somehow,'' Faust said.

LAIFF's limited facilities can be a drawback, however. Its largest theater has 300 seats, and movies are limited to a single screening. That can be tough on filmmakers who put all their resources into publicizing a movie, only to have key people turned away or unable to make it.

Faust says even this will change. ``I tried to get additional venues this year but they didn't come through. We're definitely going to find a way to hold two screenings (of each movie) next year.''

Launched just three years ago and conceived as a way to help create a sense of community among film lovers in spite of L.A.'s sprawling urban setting, LAIFF differs from the long-running American Film Institute event in a key way - it's entirely devoted to showcasing the latest independent films, as opposed to films from around the world.

The emphasis on new American films available for distribution is what has turned the festival into an event with significance for the film industry as well as the general population.

``Anything that offers fresh new product is appealing to acquisitions people, and there are a number of things at this one that I'm really excited to see,'' said Marcus Hu, co-president of Strand Releasing. ``And this is right in our own back yard.''

Industry pros are giving LAIFF high marks. ``This is a straightforward, user-friendly festival that's very well-managed,'' said Dana, who's been on the scene long enough to remember the early days of the Sundance festival, when ``they used to beg us to come up there.''

``LAIFF has done a superlative job of getting this festival to such a sophisticated place in its third year. There are a lot of interesting movies, more press, more attendance, and it even has a community flavor.''

Sales opportunities aside, the achievement of creating a fleeting sense of community in such a sprawling city is considered by many to be key to the event's growing appeal.

The open-air studio canteen at Raleigh Studios becomes a day-and-night hangout where spontaneous meetings and movie discussions flourish.

``At other L.A. film festivals, people disappear into the night with no trace. I like to go to a festival where people stay around later to argue about whether a film was world-class or a failure,'' said Ray Price, marketing vice president at Trimark Pictures.

``People should remember that film festivals are primarily about building a bridge between people with independent visions and an audience,'' says Dowd. ``Festivals like Toronto, Sundance and Seattle all have a lot of stories about how they've built that bridge. LAIFF has a few of those stories right now, and in a few years, it'll have a lot more.''

Big night for `Little City'

The third annual Los Angeles Independent Film Festival, which is open to the public, begins today at 7:30 p.m. with the world premiere of ``Little City'' at the Directors Guild of America at 7920 Sunset Blvd. in Hollywood. The closing night movie, ``Off The Menu: The Last Days of Chasen's,'' begins at 7:30 p.m. Monday also at the DGA. Both screenings are followed by parties.

The festival program includes 20 feature films, three documentaries and 34 shorts. The following are among the festival highlights. Also included are a New Media/New Technologies forum, a storytellers' lounge, and seminars.

For ticket information, call Theatix at [phone].

9:35 p.m. Friday at Paramount: ``Nevada,'' directed by Gary Tieche, about a beautiful stranger who becomes an object of speculation and lust in a remote desert community. With Saffron Burrows, Gabrielle Anwar, Amy Brenneman.

1:15 p.m. Saturday at Raleigh: ``Colors Straight Up,'' a documentary directed by Michele Ohayon about the lives of Latino and African-American teen-agers who comprise the L.A.-based inner-city performing arts group.

1:30 p.m. Saturday at Paramount: ``Ocean Tribe,'' directed by Will Geiger, about a group of surfers who return to sacred waters to keep afloat the spirits of a dying friend with one last surfing trip.

4:10 p.m. Saturday at Paramount: ``Levitation,'' directed by Scott D. Goldstein, about a delusional young woman who floats between the harsh realities of life and a secret fantasy world.

10:30 p.m. Sunday at Raleigh: ``Sick,'' a documentary directed by Kirby Dick about the life and work of L.A-based performance artist and masochist Kirby Dick.

9:10 p.m. Sunday at Paramount: ``Dogtown,'' a wry comedy directed by George Hickenlooper about a 30-year-old failed actor who returns to the small town of his childhood. With Trevor St. John, Mary Stuart Masterson, Rory Cochrane and Jon Favreau.

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Photo, Box

Box: Big night for `Little City' (See text)

Photo: (Color)Festival entry ``Ocean Tribe'' is about four friends who journey to Mexico to take a dying buddy surfing.