Variety is out tonight covering the .LA auctions on Go Daddy. The reporting is a little confused as no this is not the first city based domain extension on the market. The .LA extension is still the country code for the country of Laos. You can see with all the confusion we have with just repurposed country codes that the new tlds are really going to be fun.
From the article: GoDaddy added .la to its catalog June 20, and expects the domain extension, which is distributed by CentralNic Group, to blow up upon its Monday reveal, as many of the desired entertainment URLs are already taken with top-level domains such as .com, .net and .org.
The auction at Go Daddy started today, here is the link to the special auction event that runs until July 18. 273 names in the auction. Hollywood.La which would be sought after has been owned for many years by a British company. The domains does not resolve.
You can read the whole Variety article here.