A reference to a song by the same name from the band "O Pioneers". It was originally used to describe a place filled with hipsters who will continually judge you.
But it was bastardized and now it is used to describe something that is very awesome.
It can also be a group of people who are very righteous
"I'll never fit in down in Cool Kid City"
"Oh man, that righteous item you have there is totally Cool Kids City."
"We are Cool Kids City."
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