The best way to make an Special City is through a) Natural development and b) Story(s). Of course, you can "Cheat" and use a project to advance its status.
Building a town technically does NOTHING, and maybe the surounding land gives 1Domestic. If you describe the effect very well, the town centralizes and secures the local industry/agriculture/whatever and you get a bonus. Cities intrinsically offer 1 Urban, so it is the RESULT and not the CAUSE of good rural development. However, good city development's (both story and EP) bonus is the appearance of a SPECIAL city.
I would see perhaps the border city be a cultural one, where wine, religion and races mingle on the border.