Yeah, that's what I think.
Even the city where Sonic lives is more suited to the Wood Oak name than New York or Detroit-like.
The name is coming from Japan so it's understandable if the naming is kinda off.
(Just like some character names in Valkyria Chronicles)
I'd prefer too if they change it to real city in movie version.
I agree. I googled "most crime ridden city in America" and I came up with Detroit, which I think would be a cool setting for a Streets of Rage movie whenever it be set in twenty-twenty-something or eighties or early nineties as the games were.
For a city with high crime rate as well as gangs, the Syndicate would fit right in, especially if the Syndicate owns Detroit gangs like subsidiaries.
And given the Earth depicted in Sonic's movies is more like our Earth, it's likely that Earth will have it's own Detroit.
It's either that or eighties to nineties New York or Los Angeles.