The Arkham City is one of the most recurring locations in the HPL prose - this is the location of Miskatonic university which hosts the deadly Necronomicon. It is also "famous" for the Arkham sanitarium, where end those, who had a unfortunate chance to glance at things they shouldn't. But besides those two places, its a beautiful New England town.
Why then the infamous psychiatric hospital where maniacs such as Joker or Two-Face spend their time between they escapes called the same name? Is it a pure coincidence or is there connection between those two places?