VIRGINIA BEACH, SEPT. 1 -- Laborfest '90 developed into a cautious exercise in peaceful coexistence today as whites and blacks shared the oceanfront area under the watchful eyes of police on every corner.

One year after riot police battled angry young people in racially tinged violence that caused $1.4 million in damage, beach lovers with a variety of backgrounds and messages strolled side by side, many of them unsure of what to make of the weekend.

The tension that gripped the city last year was noticeably reduced -- although not altogether absent.

At Redwing Park, crowds were light at an outdoor concert featuring prominent black musicians. Some who did attend said they were chafing at the city's heavily regimented crowd control arrangements, in which downtown streets were restricted by roadblocks and concert-goers had to travel by bus to the park, four miles from the main resort area.

"This is really way out in the boonies. It's like they made an effort to put us away," said Lorretta Jamison, a black student at George Mason University. "A few people who were on the bus that I was on kept asking, 'Where are they taking us?' It's like they were treating us like animals. It's like segregation."

The concert was viewed as the major draw for this year's Laborfest, with such talents as the Good Girls, Experience Unlimited -- better known as E.U. -- Today and rapper M.C. Lyte. City officials had chosen the park because it could handle up to 25,000 concert-goers. The audience numbered closer to 2,100.

"I anticipated a greater crowd. The show of force from last year deterred a lot of people, I think. I'm losing money up the yang," said Angelo Epps, a food vendor from Norfolk.

City officials tonight estimated the crowd in the oceanfront area at 28,000, far smaller than last year's estimated crowd of 100,000. Police described the weekend as very quiet, saying they had made only 16 arrests Friday night, all for misdemeanor or traffic charges.

Mayor Meyera Oberndorf, citing the peaceful atmosphere, said she felt "very, very upbeat and excited" about Laborfest '90. Arthur Jarrett Jr., president of the student association at predominantly black Norfolk State University, said the weekend is helping young blacks in the Hampton Roads area change their image as "hell-raisers."

"That's success for us," he said.

As tourists strolled down Atlantic Avenue, the city's main resort strip, dramatic differences could be seen from last year's Greekfest. That annual gathering of young blacks exploded into violence and looting after many blacks said they had been made to feel unwelcome by the town.

Police, who last year were criticized for ticketing young people for minor infractions, this year generally stood silently on street corners and at roadblocks set up to discourage traffic.

Large numbers of the tourists on the beach and Atlantic Avenue were white, many saying they were curious after publicity about last year's incidents.

Charles Reynolds, a black radio talk show host who worked as a volunteer greeting out-of-town visitors, said the routine mixing of white and black sun lovers on the beach and sidewalks is "more significant than anything else" that has happened since Greekfest '89.

Some blacks expressed surprise at seeing whites on the beach.

"I thought I was at the wrong beach," said Joseph McGhee, 22, of predominantly black Virginia State University. "Last year, you could count the white people on this beach on one hand."

Relations between whites and blacks, if civil, were not always warm.

"I'm having a good time, but everybody seems on the edge," said Arven Barnes, 23, of New Castle, Del., who is black.

"Nobody seems to know what to say to one another," said Linda Shaw, 36, of East Orange, N.J., who also is black.

Melinda Schwyn, who is white and lives in Michigan, felt no anxiety as she sunned herself in the sand. "Everybody's an adult; they stay to themselves," she said.

Although tourists strolled up and down Atlantic Avenue throughout the day, shop owners said they were getting almost no business, and some black visitors said they were intentionally not spending money in Virginia Beach, out of anger over last year's violence.

At a Souvenir City shop, clerk Holly Nicholson said she made only two sales in more than an hour this morning.

Hotel bookings on the resort strip stood at 75 percent, about the same as last year, despite the creation of alternative events for blacks in the District of Columbia, Maryland and elsewhere in the mid- Atlantic region.

Many motels and shops hired additional security guards for the weekend. But other events, planned and unplanned, illustrated the sharp turnaround in racial tension from a year ago.

In today's predawn hours, Christopher Moore, a black Hampton resident, was cited for disturbing the peace. Moore said he was walking along the beachfront strip of Atlantic Avenue just after 1 a.m. singing a rap song by Public Enemy when he was taken aside by officers.

A year ago, when the streets were filled with cars, pedestrians and blaring music, such an incident could have escalated quickly into trouble. But although Moore was angry about the citation and the requirement that he go to court, he and a friend reacted to a television camera's presence by clowning as if they were friends with the two officers.

And away from the oceanfront, a job fair for black youths was a significant success.

Although the fair, put on by Norfolk State and Old Dominion universities, was mostly attended by blacks, it also drew other ethnic groups and whites. After only 50 minutes, nearly 500 people had registered for the fair, which featured 32 private companies and government agencies.

"This shows a commitment to the black community," said Darron Wheeler, 22, of the University of Virginia, who is black. "They are starting on the right foot. Good things are bound to happen."

The job fair, said Maynard O. Crawley Jr., a Prudential Insurance representative, was the "equivalent of taking a time bomb and throwing it into the river."

"This helps defuse some of the negatives associated with Greekfest," he said.