Pretty cool looking on the big screen....You might want to remember as well that Time Square has BANKS of police cameras all over the place....as well as officers roaming around. Not to rain on your fun too much, but I personally feel brining a 'illegal' laser to that place is a bad idea...
As far as I know there is nothing akin to a 'mobile' CDRH variance that would allow for individuals to operate higher powered lasers subject to their own qualified cognizance. If so I would be one to obtain one. I have been working with lasers for going on 30 years now and certainly am aware of the caveats in operating them. I am of the opinion that there should be a licensing process. If folks can obtain permits to legally carry outright lethal devices (guns) then there should be an equivalent permitting process for essentially non-lethal devices of a similar nature.
The subject of legalities is probably best left to the legal forum here on lpf.
As far as the concern about the police, generally speaking it has been my experience that they are really only going to be taking an interest if they clearly see the beam and see that the laser is being operated in an unmistakably dangerous manner. Also based upon what a younger and less experienced laserist previously explained to me relative to an experience he had, the police will confiscate the laser and make it available for pickup at the local station at a later date.