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Of course there is no way of knowing which the specific tile(s) is beyond trial and error as far as I can tell, and the "Valid location" vs. "Structure already exists" messages are singularly unhelpful.
You can see it on the map.
All hexes the city used to occupy are covered in brown debris. Cities are always 7 hexes in size, 1 centre hex surrounded by 6 outer ones, so you just find the centre hex and build there. (Mountains or water may block the outer hexes, leaving a city with less territory, but the center hex is always there.)
And you don't need to move the settler either to find the right spot, you can just click "build city" and then hover the mouse over the map until the cursor turns green.
Yes, well once you know that it's simple, it seems obvious and logical. If you don't it's not, it's completely mystifying. That's 'cos you've pointed out three facts that the UI itself doesn't explain.
It's not the most egregious UI crime ever committed, however it is a classic example of how hard it is for devs working on something like that to see it through the eyes of player who doesn't know how something works yet.
It should work if you do those things.