"I'm a liar for hire," Falk said the other day, bantering loudly so he could be heard above the roar of traffic in Times Square.

"I'm paid to hype, to emphasize, to enlarge, to create," said Falk, 79, spreading his arms as though Broadway's gaudy neon lights were his audience. "Of course, 50 percent of what I say is true, so I'm not really a liar. I'm an embellisher."

In other words, Falk is a public relations man.

He is a press agent of the old school, a huckster known for staging outlandish publicity stunts and making up quotes that gossip columnists could attribute to his clients. He claims the word flak was coined when a typographer misspelled his name.

Falk once hauled a cross up Broadway to promote a show about Jesus, tried to check a trained flea into the Waldorf-Astoria, dressed a model in hot dogs, and claimed to be the sole heir to the Falkland Islands.

Falk is also the mayor of 42d Street - "Maybe you should put that in quotes," he suggested. As proof, he carries a leather-encased badge issued by an outfit called the International Locality Mayors.

Falk said that his role as mayor and his expertise with exaggeration make him uncommonly qualified to judge a $2.5 billion project that has dragged on for nearly 10 years.

The plan is to redevelop Times Square into kind of a midtown Disneyland.

"World's Biggest Swindle!" Falk called the redevelopment project in one of the news releases he has churned out since a state agency called the Urban Development Corp. announced its plans a decade ago.

Falk complains that the Times Square project is the work of "uptown do-gooders" whose idea of urban renewal is to replace the strip shows and skin-flicks with four office buildings ranging in size from 32 to 57 stories.

Falk fears that 42d Street will lose its sleazy allure.

"Times Square is alive," he said. "Times Square is real. There aren't any phony theaters. It's not Park Avenue. It's the heart of America."

The heart of America?

Anyway, earlier this month, Falk was forced to surrender to the march of progress. The Urban Development Corp. evicted the mayor of 42d Street from his shabby one-room office, which overlooked the spot on Times Square where a huge, drunken throng will cheer the arrival of 1992 in a couple of days.

Falk was the last tenant to leave the aged 12-story office building, which the Urban Development Corp. intends to knock down and replace with a better class of building.

Falk embodies the old Times Square - he is a brash, bug-eyed connoisseur of kink who twists the ends of his snowy handlebar mustache with a flourish.

Shane Newmark, the spokeswoman for the Urban Development Corp., represents the new Times Square. She is dry, circumspect and speaks in a curt British accent.

"What delays?" she said, when asked about the fact that 10 years have passed without the development corporation's turning a spade of soil on 42d Street between Eighth Avenue and Broadway.

Newmark explained that since then-Mayor Edward I. Koch proposed the project in 1981, the Urban Development Corp. has withstood nearly four dozen lawsuits from neighborhood groups, property owners and liberal activists.

"We won all of them," she said.

Since the last lawsuit, the development corporation has spent 18 months assuming title to 34 properties. It is now completing eviction proceedings against tenants of the buildings at 42d Street and Broadway, where a private developer will begin construction of the first of four office buildings "imminently," Newmark said.

The plans are ambitious. In addition to the office buildings, the state agency will renovate nine theaters along 42d Street and lease them to private operators for various uses. The city also will reconstruct the Times Square subway station. Plans for a hotel and a 20-story merchandise mart, however, have been delayed.

The project will "transform the blighted, crime-ridden stretch of West 42d Street into a dynamic commercial and cultural thoroughfare," the development corporation says.

But owners of office buildings in the neighborhood, which are struggling with 20 percent vacancy rates, complain that the state's plans to add 4.1 million square feet of office space will only drive them into bankruptcy.

"It's a boondoggle," said Falk.

While the Urban Development Corp. struggled with lawsuits for a decade, private developers built several new hotels on Broadway above 42d Street and jazzed up Times Square's illuminated, trademark billboards. The latest sign, a $3 million four-story bottle of Coca-Cola, will be unveiled on New Year's Eve.

But 42d Street became increasingly squalid during the same time. Businesses closed, leaving a higher concentration of porno theaters. Some of the more stately theaters, such as the New Amsterdam, developed leaky roofs that ruined their ornate interiors.

"Nothing has happened because of the threat of condemnation," said Douglas Durst, the vice president of the Durst Organization, which had planned to renovate eight 42d Street theaters on its own but had to give up the theaters when the development corporation took them over last year.

"If their intent was to make it a no-man's land, that's what they've done," said Norman Adie, who runs three first-run movie theaters along 42d Street that are struggling to survive even though the movies he is showing - Star Trek VI, Bugsy and The Addams Family - are filling up theaters elsewhere.

"People are scared to come on the street because they've turned off all the lights on the marquees and boarded everything up," said Seymour Post, owner of a sporting-goods store that recently rolled back its closing time from 10 p.m. to 7 p.m. "They've made it look like a disaster area."

Despite his claim of being tired, Richard Falk bounced along 42d Street, sticking his head into the doors of adult bookstores and peep-show parlors. A blonde partially wrapped in a bedsheet beckoned from one establishment. Falk gazed at her, preened his mustache and kept talking.

"Why do people get married?" he said. "Because they like to see people of the opposite sex naked. And that's what you can do on 42d Street, only you don't have to look at the same one every night."

Falk got his start on Times Square in the 1930s, when the legitimate theater was moving away from 42d Street and motion pictures were moving in. A native of Newark, N.J., Falk worked for the Schubert Organization before opening his own press agency in the 1940s.

"There was no neon then. It wasn't so high-tech," he said. Most of the marquees then were lighted with strings of white light bulbs.

But now most of the signs are dark or downscale, like the one hanging outside Hotel Carter, which advertises nightly rates of $49.95 - "Cheaper Than Most Cab Rides."

"There, take a look at that," said Falk, pointing at the Times Square Theater at 219 W. 42d St., whose ornate, columned exterior was boarded up and covered with graffiti. "That was one of the great buildings of the world. Now it's just a shame."

The sponsors of the redevelopment project say their aim is to restore such theaters to their earlier splendor. They say they have no intention of destroying the area's honky-tonk gaudiness and that retail businesses in the new development must remain open until 1 a.m.

But Falk believes that the state's development plan is already driving away the patrons of 42d Street.

Since his eviction, Falk moved his office six blocks north to 48th Street, where his possessions remain tucked into cardboard boxes and old, dented file cabinets. It looks like he forgot to unpack.

But sometimes these days, Falk seems a little forgetful.

"What was that time when everything was closed, restrained?"

The Victorian era?

"The Victorian era, that's it," he said. "Well, it's gone."