Actually the Sevii Islands were based off of the Izu and Bonin Islands off the south-southeast of the Main Japanese Island. And I thought the Sevii Islands were a nice addition, kinda mirroring the Orange Archapelego. Considering that the time-line of the Games apparently has Fire Red and Leaf Green happen in the same time frame as Ruby/Saphire/Emerald, while Gold/Silver/Crystal happen at the same time as Diamond/Pearl/Platinum. Besides, if you couldn't go to Johto in Red/Blue/Yellow, you have to get SOMEWAY to complete your Pokedex on those Games.
And New York City doesn't have it's fair share of history, myth, geography, geology, looks, and several business origins? It's one of the first cities of the United States! It's pretty iconic of the USA. Mention the US and one of the first things to come to mind is the NYC.
And Wiki's article on New York City says one of it's Sister Cities is Tokyo, which was the basis for Saffron City in RBY. Need an analog somewhere...
Look, not saying you shouldn't think that Michigan would be 'great' for a Pokemon Setting, every region of every country of every continent has some interesting local lore and history. We've got some in Kansas, but I doubt Game Freak would make a Pokemon Game based here. It's pretty bland. Unless you make it the entire Central US from Texas up to Canada, then it might get a bit interesting, but otherwise, yeah.
New York City is a better choice.