It's Times Square at twilight, several floors above the tango of rush hour, and Alvin Ailey is standing in his corner office, which is pointed like a ship's prow into the darkness. He is talking about the paradox of his just receiving one of the prestigious Kennedy Center Honors, just as his Alvin Ailey American Dance Theatre is doing a slow dance on a killing ground.

"We're in terrible shape; we're about to close," says Ailey. "The future really is in doubt, with all of this deficit ($600,000). And we've been in this building 10 years, and are going to have to move." So far, he adds, there's nowhere to go.Ailey was cited in early December for Kennedy Center Honors, the 11th national celebration of achievement in the performing arts, as the choreographer "who has expanded the boundaries and broadened the audiences of modern dance."

Ailey, a pioneer black dancer-choreographer, made the leap from picking cotton as a boy in the Brazos Valley fields of Texas to international fame as founder of the dance theater which has circled the world with its blend of ballet and modern dance.

Ailey says William Hammond, executive director of the company's Dance Theatre Foundation, who keeps tabs on the $6 million budget, is "very hopeful, but I'm very realistic, and keep saying `Well, what if all this falls apart?' And if it does fall apart, I will consider it a shame, 40 years of dance, 30 of it in this country, to have it all fall apart around you."

It's hard to believe that Ailey, riding the crest of arts fame with the honors award, finds that at this heady moment his company may have to fold. Why is it in trouble?

Hammond explains, "Funding hasn't kept up with what is necesssary to sustain Alvin's vision of what the company should be." Ailey mutters, "Yeah, the constant stacking up of expenses, rising prices, rents on this space (and its several studios) - you can't afford (it)." Costs now run $500,000 a year, just for offices and several studios for the company's international dance school.

They say they've tried all the major donors, the foundations, the corporate givers, and the National Endowment for the Arts (which gave them $300,000 this year), but the outlook is still grim. If Ailey were to choreograph a work about it, it might be a Danse Macabre. Still, there's the 30th anniversary of the company coming up this month and, with it, a gala benefit and a four-week run for the company at City Center here.

More important in terms of the national spotlight there's the Kennedy Center Honors. Ailey is one of five honorees this year for the national bow to those who give their lives to the arts. (The others are comedian George Burns, actress Myrna Loy, producer and Kennedy Center founding chairman Roger Stevens, and violinist Alexander Schneider.) The Kennedy Center Honors gala will be telecast nationwide in a two-hour special on CBS Dec. 30.

Alvin Ailey is not the kind of guy who pirouettes across the room with joy, but it's obvious the award moves him deeply at a time when professional recognition means all. Low-key, soft-voiced, he talks at the speed of a teletype machine: "I'm pleased as punch to be part of that illustrious group of people who've been honored since the Kennedy Center Honors started, especially Roger Stevens, a wonderful guy who has been trying to help me keep this company together since 1966, the architect of Kennedy Center, a really thinking spirit, a really important man in the arts."

He's humble about being on the list of past honorees that have included dancers Martha Graham and Katherine Dunham, choreographers George Balanchine and Antony Tudor: "I mean, I can't possibly think of myself on that level." And then he makes a bittersweet observation: "I'm very glad that the arts are still being celebrated yearly by these higher-ups who seem to care on one level but, on the other hand, don't seem to care so much when it comes to budget slashing. We've all had to suffer with that part of the arts. So I hope that the new administration will be more sensitive to the needs of the country's artists."

Alvin Ailey is tallish, with the lithe body of a dancer, but one who has stopped being connscious of that body, one who doesn't sneak a quick look in the ballet studio mirrors. He stopped dancing nearly 25 years ago to pursue his true love, choreography. But when he was still on stage, critic Doris Herring wrote in Dance magazine, "As a dancer, Ailey is exceptional. He reminds me of a caged lion, full of lashing power that he can contain or release at will."

Hearing that, Ailey murmurs, "I never thought of myself very much as being a fantastic dancer, when I was young and thin, agile and athletic, and all that kind of thing. I always saw myself as a creator, as a producer, as a person providing spaces for people to develop."

His short-cropped black hair and beard are grizzled with gray, his face seamed, the brown eyes snappy as exploding firecrackers. He is wearing a multicolored sweater with an intricate pattern, a knitted scarf in another pattern, dark trousers, black loafers and socks. Ailey holds a black watch in his long brown hands. He sits comfortable as a cat in an orange chair; as he talks those eloquent hands choreograph the air.

Being born in Rogers, Texas, and growing up black during the Great Depression "was a two-edged sword. It was full of pleasure and full of pain," he says. He lived in Rogers for the first 12 years of his life, "with all its racial problems, segregated schools, and the Ku Klux Klan running by every now and then, and segregated housing, and the (whites-only) water fountains, all that classical stuff.

"And also (the South) was full of a rich lore, full of wonderful gospel singers and folk singers, . . . black social clubs, churches that were theaters in themselves - in the midst of all this sort of racial agony. So it made for a very rich childhood, full of energy. A lot of (my) ballet came out of there also."

As Ailey entered his teens, his mother and he moved to Los Angeles (she worked for Lockheed), where he found "a more open society, less racism, another kind of theatrical experience," jazz, theater with major stars, and dance. At 15 a teacher took him to see the Ballet Russe de Monte Carlo, which he loved. "But at that time black men didn't dance; a black man didn't look on dance as a possible career. Choreography? I didn't even know what it was." That is, until a friend, dancer Carmen DeLavallade, invited him to a modern-dance class, given by a man named Lester Horton.

Ailey credits Horton as being the greatest influence on his life in dance; dropping his foreign language major at UCLA, Ailey joined the Lester Horton Dance Theatre and became its choreographer at 22 after Horton's death.

When he and Miss DeLavallade appeared in the Broadway hit "House of Flowers" in 1954, he became a star. He studied with Martha Graham, Hanya Holm, Jose Limon, and other greats. Then he founded the Alvin Ailey American Dance Theater.

The company began touring the world in 1958 under the wing of the U.S. State Department, with Ailey's potent mix of ballet and modern dance woven with jazz, gospel, African dance and music, and contemporary works.

"I always think that the best ballets are those that are the most personal - at least those of mine that endure, ones that hurt a little bit to get out, where you give a real chunk of yourself to make this happen."

While he's pleased that he has "passed the torch" to other black dancers and choreographers, the Kennedy Center award brings mingled feelings: "The irony that you should be honored and still falling apart - it just says how tremulous the arts are."