"A dedicated landing page on the same domain is the best soultion. Make sure to target variations of the keyword and location."
So long as you don't have your current city within the domain itself...
If you do, then a new domain may be necessary.
Otherwise, make sure the new city is in the URL, title tag (etc., you know the score 
) and ensure you mark up the address with microformats.
ALSO : some sites have their business location in the footer across all pages - make sure this isn't the case on the page targeting the new city...
