Not in Kansas—or New York—Anymore
Guess what movie inspired Bryan Singer when envisioning the setting for The Usual Suspects? If you guessed anything other than The Wizard of Oz, you're wrong. (Source)
Weirdly, that was Singer's model—there are no munchkins or flying monkeys in this flick, after all—but it makes sense if you think about it.
The five suspects start off in New York, which Singer sees as a place of concrete, practical realities. It's not a land where dreams come true, but a place where the cops drag you out of bed and into a police lineup. It's also where the suspects hatch their scheme and carry out their first robbery as vengeance against the cops—a heist that goes off believably and successfully. New York is what "Kansas" is in the Wizard of Oz: everyday life.
But when they head to L.A. to sell those goods, it's like when Dorothy gets transported to Oz via tornado. Now, they're in a world where anything can happen—dreams can come true…but so can nightmares.
L.A. is where Keyser Söze tricks them into his service, and finally destroys them. It's the kind of place where a seemingly mythical criminal can resurface and assert his control.
Actual L.A. sites figure importantly in the movie, too. The suspects conduct their dealings with Redfoot at the Korean Bell of Friendship, and have their final shoot-out at the Port of Los Angeles (which is located in San Pedro, a harbor-side community in L.A.). (Source)
Micro-settings are extremely important to the movie too: for instance, the messy, messy office where Kujan interviews Verbal.
Sgt. Rabin describes it this way:
"Yeah. It's got it's own system though. It all makes sense when you look at it right. You just have to step back from it, you know? You should see my garage. Now, that's a horror show..."
Within it's clutter, Verbal is able to pick out details from the bulletin board, constructing a story right under Kujan's nose. There is a system hidden in it—the clues to Verbal's fabricated story—although Rabin doesn't realize it.