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What Robert Falls has described as the ”end of a cycle,” for himself and for Goodman Theatre, arrived this month amid a swirl of conflicting emotions.

For Falls, 38, the final months of his second three-year term as artistic director of Chicago`s oldest, largest and most lavishly endowed resident theater have been filled with contrasting events of reward and denial. And as he goes through the ”normal negotiations” (his phrase) of signing a new three-year contract-including a year to be made up of long-range planning and no day-to-day responsibilities, at a slightly reduced salary-he is viewing the future with an uncharacteristic measure of pride mixed with bitterness.

This spring, while Scott McPherson`s ”Marvin`s Room,” in a production that originated at the Goodman Studio Theatre in 1990, was collecting an array of Off-Broadway prizes, Falls brought home from New York a Tony Award recognizing Goodman as a leader in the country`s resident nonprofit theater movement. Meanwhile, his distinguished 1990 Goodman production of ”The Iceman Cometh” was invited to have a prestigious remounting this fall at the Abbey Theatre of Dublin, and his continuing leadership in broadening the Goodman`s audience base resulted in a $1 million grant, largest in Goodman`s history, from the Resident Theatre Initiative of the Lila Wallace-Reader`s Digest Fund. Thanks to Falls` instant response to the work of writer-actor John Leguizamo, moreover, the Goodman quickly put together a record-breaking premiere run of Leguizamo`s one-man ”Spic-O-Rama,” which brought in sizeable new audiences to the theater.

In any year, that would be a remarkable record of accomplishment. At the same time, however, Falls was experiencing deep personal disappointments with his own projects at Goodman. Two original works in the 1991-92 season, Steve Tesich`s ”On the Open Road” and the current ”Riverview: A Melodrama with Music,” with a book by John Logan, both pieces on which Falls had invested much time and care, were given a decidedly mixed critical reception. So unhappy was Falls with the reviews of the Tesich play, in fact, that on the morning after its premiere, in a rare breaking of public cool, he called one newspaper critic to lament the reviewer`s inability to appreciate Tesich`s work.

In the case of ”On the Open Road,” Falls and Tesich will have a second shot at critical evaluation of their work when the play, with a revised script, makes its New York debut early next year in one of the smaller auditoriums of the Public Theatre.

And with ”Riverview,” Falls has the satisfaction of knowing that, whatever raps it received in reviews, the $750,000 show, most expensive in Goodman`s history, is nightly playing to sold-out audiences and should meet or exceed its projected ticket revenue.

Still, as he readied himself last week for a trip to Dublin to cast the new ”Iceman” production, Falls could not disguise the anger or hurt he felt over the failure of both works to triumph at his home theater. Along with producing full-scale renditions of the classics on the main stage, Falls had pledged to nurture important new plays and musicals when he became Goodman`s artistic director in 1986, and none of the four new works he personally guided along over the last three seasons-including Tesich`s ”The Speed of Darkness” in 1989 and the 1991 Louis Rosen-Thom Bishop musical ”Book of the Night”-

reached the heights he had conceived for them.

In his direction of such classics as Eugene O`Neill`s ”Iceman” and the 1989 version of Moliere`s ”The Misanthrope,” Falls says, ”I think there was a stillness, a steadiness, a simpler and more deeply emotional approach than I had shown in some of my earlier Shakespeare and Brecht work.” Balanced against this was the ”far harder, far more painful” experience he had with

”rich, ambitious, perhaps inherently flawed new works by writers I cared about.” Reacting to the critics` reception of these original creations, Falls admits, ”I found myself much more vulnerable.”

As concepts, Falls` original productions were always intriguing. In

”Riverview,” for example, the idea was to show the dark spirit lurking beneath the American dream through the metaphor of a legendary Chicago amusement park. In practice, however, the concept appeared over-produced and artistically undernourished, hobbled by a trite book, some weak casting (a recurring problem at Goodman) and a melange of old pop standards poorly integrated into the action.

Among other disappointments of his six years at Goodman`s helm, Falls says, are the five Shakespeare productions, which, with the elegant exception of associate director Frank Galati`s 1990 ”The Winter`s Tale,” had many limitations in performance. The 1991 ”A Midsummer Night`s Dream” was severely hurt by associate director Michael Maggio`s incapacitating illness in mid-production, and the 1992 ”Twelfth Night,” again an interesting concept in its nearly all-female casting by renegade English director Neil Bartlett, proved a disaster.

”I think my taste in Shakespeare may be out of synch with other people`s work,” Falls says. ”There, we`ve probably been outdone by people like

(director) Barbara Gaines and her Shakespeare Repertory company.” (Not coincidentally, there is no Shakespeare scheduled for Goodman next season.)

Despite these shortcomings, and despite the letdown of the recent season, Falls on balance has compiled an enviable record of achievement at Goodman these last six years.

When his appointment as Goodman`s artistic director was announced in late 1985, Falls found a theater more than $650,000 in debt and with a list of 21,421 subscribers. At the end of this present season, after a yearly succession of operating surpluses and growing audiences, there are 22,840 subscribers and a balanced budget.

Talented young directors such as David Petrarca, who has moved from an internship to a position as resident director, and Donald Douglass, who buoyantly staged the Studio production of ”Spunk” this season, have been given key opportunities to work at Goodman, and next season, under Falls`

aegis, two other Chicago-based directors, Chuck Smith and Mary Zimmerman, will develop projects at Goodman as ”affiliate artists.”

After 15 years (including nine seasons before Goodman at the small, innovative Wisdom Bridge) of running theaters as an artistic director, Falls himself will officially pull out of the operations routine and turn over day- to-day management and planning for the 1993-94 season to Maggio, 41, now miraculously recovered from his respiratory illness through a 1991 double lung transplant. ”That was the purpose of bringing on Frank (Galati) and Michael

(Maggio) as associate directors,” Falls says, ”so that we could tag team each other when the time came.”

Over the years, Falls has consistently expressed interest in directing in the movies, but at this point he has no film projects lined up, and in any event, he does not talk or act like a man who is ready to sign off on a theater he wants to guide.

Having come to the end of one cycle of developing new works, Falls has no plans for directing a main stage production in 1992-93, though he is keeping a Studio spot open, just in case he finds something he wants to do.

Otherwise, he plans to do some traveling to see other directors`

productions, catch up on his research and reading in the field, and work on long-range development for the Goodman`s planned move to a new location, probably in the North Loop area.

As the project for a new theater at Dearborn and Randolph streets inches its way through the maze of city planning, both Falls and Irving Markin, Goodman`s board chairman, are optimistic about the eventual move to a larger complex.

Falls even hopes he`ll actually be talking to architects about the theater layout.

Falls says that when he formally revealed his plans to the Goodman board at its end-of-season meeting last month, ”There were zero reservations, zero problems, zero questions” about his decision.

Markin, meanwhile, says, ”Bob has our complete support,” and he adds that none of the 69 board members has publicly complained about the season in general or ”Riverview” in particular.

(Falls and Goodman management did themselves no favors, however, by hemming and hawing while reluctantly patching out the news of Falls` working arrangement for next year. This kind of ham-handed public relations only caused confusion and helped foster cynicism.)

Quite naturally, there have been private rumblings among some board members about the cost and quality of ”Riverview.”

But even the nay-sayers, including this writer, who question the taste and commitment that went into producing ”Riverview” should note that part of Goodman Theatre`s mandate is to use its $6,735,308 budget to produce works on a scale and with a scope that only a premiere resident theater can muster.

When Falls` all-out theatrical approach comes a cropper, as it did in

”Riverview,” it`s disturbing; but when the same flamboyant theatricality works, or comes near working, as it did in Bertolt Brecht`s ”Galileo,”

Falls` first production as Goodman`s artistic director in 1986, it`s most impressive.

The questions about the choice of material and the quality of performance that Goodman`s 1991-92 season have raised ultimately are probably healthy for the theater and its artistic director. For Falls, next season will be a time

”to replenish and get a little distance.”

With six years behind him at Goodman, Falls is not yet a grizzled veteran, and he still has a lot to learn. But though he says he feels good and is nowhere near burnout, Falls knows that, whatever he chooses to do in the next year, he needs to get away from the intense demands he has made on his ego and his talent over the last season.

”It will be good for me,” he says of his next year. And he`s right.