They chose NY specifically because it's the only part of the US that lacks any folklore of its own.

The West has
>cowboys
>fearsome critters
>ghost stories like the Red Ghost story
>mexican shit

The South has
>random folklore like the Wishing Foxes
>fearsome critters
>ghost stories
>spooky swamps, werewolves. and old decrepit plantation houses
>Louisiana has their own version of French and holy shit all the french shit in Unova would make sense here

Other North Eastern states have
>fearsome critters one of which is an actual dragon myth with its own symbol to keep it at bay
>ghost stories
>lovecraft shit

NY has fuck all. It has the alligators in the sewer myth, but the south actually fucking has alligators.
GF clearly used it because they knew it had nothing of its own, and could shove in as much Japanese as they wanted.