It's a nickname for New York, the city they added when updating the original Metropolis Street Racer to the XBox. Early screens proved so popular in the hyped build-up to the XBox's release that the original codename in development just got stuck.
I think its because the original game was Metropolis Street Racer. (Supermans City) So the codename taken for the Xbox sequel was Project Gotham. (Batmans City) The name was originally going to be changed at some stage but it kinda stuck.
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