Yeah, I think locations are fair game. How many authors use the Pentagon and White House in novels, and in movies, too.
I was kind of wondering about this with certain business names and name brands. For instance, in the Dresden Files, Wal-Mart and Coke...huge names. Did Jim have to pay them a percentage to use their brands? I've written things in which I've used certain vehicles - Honda Accord, for instance - and was never quite sure if it would cause a stink if it ever got published.
But as far as locations go, I think it's all public domain. However, depending on the depiction of the city, there is possibility for a stink. Take The Simpsons episode in which they put on a production of Streetcar, and one of the songs in the play defamed New Orleans. Well, you'll notice in the very next episode, in the opening sequence, Bart is writing on the blackboard "I will not defame New Orleans."
It never went to court or anything, but the city complained about it, and the show offered that opening as an apology.