The geographical setting is Staten Island, near but removed from the hustle and bustle of New York City. Were the story to be set directly in the city, John and Lorraine would likely have more to engage their time and would not be drawn in by the life of Mr. Pignati. Also, it is more unlikely that Pignati's large and mysterious home would be as open to visitors if placed in New York City. Homes of his size, in the city, are too often surrounded by high fences for security and seclusion. However, Staten Island is much smaller, a suburb, and moves at a slower pace than the city.
Zindel is from Staten Island, and so well-qualified to describe it accurately. He has reported that the idea for this story came from an experience he had on the island, when staying in a large home. See the links below for more details, and thanks for using Enotes!