So many lines from that game are a little too real to be truly funny.
Source: Outer Worlds (game)
Sometimes government is worse than corporation.
And maybe it is not bad idea but there should be some exit plan for people that don't want be part of that city.
How do you ensure the Rule of Law if there are multiple States.
Neo-feudalism is coming.
That's the sort of thing that I suspect if you can honestly say it's coming (because of observable events or trends) that it's already pretty much here.
Something like this couldn't happen without the tacit approval of an actual sovereign state. No matter what powers this city claims, it has to do so under the authority of and through negotiations with the governments of Toronto and Canada (or wherever future such projects are hosted,) or else attempt to secede and fight a civil war over the matter.
I can't really think of any nefarious interests that a municipal government would have that one of these corporations wouldn't also have, and at least municipal governments are somewhat democratically accountable. Something like this is fundamentally antidemocratic.