The Arena setting needs to be decided by the scope of the powers are are going to unleash. On the assumption it is powered...

In general, I would lean in favor of making it a larger map as well, as there may be longer range characters that wish to be utilized. I'd also suggest that it be quite simple. A few things like trees for some cover, some sort of water, etc. It should have a diverse amount of 'materials' to work with.