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.