[quote=@Double]
<Snipped quote by TheUnknowable>

Where is Aquaman during all this? Surely the King of Atlantis would never allow surface dwellers to construct anything in his domain. I wouldn't be surprised if he considered this to be encroaching on Atlantis's territory and declare war.
[/quote]

He's ruling Atlantis.  Anarchy is hiring an Atlantian construction crew and mostly Atlantian guards, though, so Aquaman lets him get away with it.  Plus, it's only 10km off the coast on a 2km deep shelf, so it's not really that much in the ocean.

My idea is that many people (including Lex Luthor and Bane) and selling super-human abilities and that a normal prison can't hold them if they become criminals.  Phoenix, because it specializes in stopping super villains, needed another prison for them (Belle Reve was getting full) so Anarchy considered the moon and the ocean floor as viable places to build them, as the environment itself would prevent escape.  The Ocean won out because there were guards and construction crews available to do the work.