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This came up in my Spanish I class. My understanding is that ser is used for descriptions of permanent characteristics, while estar is used for temporary conditions.
For people, location is the latter, but cities obviously don't move. Nonetheless, my Spanish teacher told me that estar is used, not ser, in this particular case.
I felt the need to get a second opinion on this, and, furthermore, to get an explanation of why estar is used in this case.
Estar is always used for location, as it's not an inherent characteristic of physical things.
Don't think of ser as for permanent things rather for inherent, intrinsic, or essential qualities. Likewise, don't think of estar as for temporary things, but for accidental, extrinsic, or state-based qualities.
Consider this: I'm the same person no matter where I'm located. The tree outside my house is the same tree, even if I uproot it and move it elsewhere. My house, even, could be moved elsewhere, and it'd be the same. Thus we can see that location is not very intrinsic. Even though a city may not ever actually be uprooted and moved elsewhere, the logic still applies.
I think it has to do with the implicit stuff. The 'es' implies things such as adjectives or properties of the object or event that don't need to be clarified (The world cup is in Russia), while the 'está' refers to the place where the object is situated or can be found. You could think about it like:
