"Philadelphia is a city."
Translation:Philadelphia est urbs.
You're right that both options are correct.
On the other hand, using 'est' in the middle of the sentence is the more natural option for this sentence. This is because 'est' functions as a copular verb.
A copular verb is used when a subject is described. The word describing the subject is called the subject complement
Philadelphia = Subject est = verb urbs = subject complement
This is also the reason that 'urbs' is in the nomanitive case