Doesn't that seem extremely random? Some tiny island that isn't even connected to the closest major city, and it also wasn't close to Gero's lab. Why there?
Maybe Commander Red planned to attack that city before his death, and Gero was just carrying out his legacy? Either that or he tracked down his son's killer to that town
maybe that's so that they can absorb energy secretly, if that happened in the city maybe that'd be broadcasted on tele-vision sooner & dragon-team'd realize sooner by watching the news or something
Thinking about it, I dare to say they weren’t actually planning on fighting Goku that day. They probably left to test their power in a small city (thus why not attacking the big city to avoid drawing attention) and when Goku showed up they thought “well everyone’s here so why not”
1. As GSM said, possibly just a random spot they chose to target with not much more rationale than that.
2. If wanting to draw out Goku, it's the nearest fair sized city to such a notable gathering spot as Kame House.