Santa Claus decided to establish his North Pole City near the geographic North Pole because as a Demi-Angel he could see into the future. He foresaw that the North Pole would be the least human inhabited above ground region on Earth. Naturally Santa needs to stay hidden from the general public in order to adhere to the Supernatural Secrecy Pact. He also needs to remain hidden from governments who seek to harness his power, and supernatural enemies with varying dark agendas around the world. There’s also the fact that Santa Claus loves cold snowy weather.
His first choice was the South Pole due to the abundant animal life but he foresaw science stations, tourists, and eventually cities being built several thousands of years into the future when weather control systems warm up the region. Since the North Pole is merely ice floating on the Arctic Sea there wouldn’t be any chance of people living there. As a powerful supernatural being it isn’t much trouble for him to bring animals from the South Pole to live in his North Pole City. He has a love for Penguins in particular. The little fellas waddle about the cobblestone streets with glee entertaining those of us in the supernatural community lucky enough to visit the mystical winter wonderland!