You to start a conversation to find out what their intentions are. The city of Denver opened big fancy 'coworking and event space for entrepreneurs' right downtown called The Commons. It's a pretty big place with a new sleek look. It doesn't affect Creative Density from what I can tell.
What I've learned from them is that they have a different agenda than our coworking community. We, Creative Density, focus on being a great clubhouse for remote workers and freelancers with a strong community. The Commons is a great spot but they are trying to be a hub for Meetups and entrepreneurial events and a place to for people to meet versus hang out all day and work (although they could). The Commons is also located in the heart of downtown where we are about 2 miles away in the the urban area but surrounded by apartment buildings and not tall office buildings. Parking is difficult down there but not so much here.
Basically, see what the city is trying to do and where they are located because we may find that you two are going down different paths that sound similar but are actualy complimentary versus competitive.