I'm leaving a tenure track position after one year, I have a tenure track offer and a postdoctoral offer. The postdoc position is in the very nice city and I like the research projects there. But the school is not that high ranked. Will going down to postdocs hurt my future transition to faculty position?
Not necessarily. BUT, is it worth the risk?
Whether a post doc now will help or hurt depends on many things, such as, even, why you are leaving a TT position now and what your trajectory is. A perfect in every way post doc might help, but I'd think that anything less is leaving you on a treadmill without a sure path to progress. And you don't describe this offer as perfect. And, the "very nice city" aspect doesn't contribute to your career and is temporary in any case.
The goal is to get a permanent faculty position. You have an offer of a TT position which puts you closer to the goal. If it is in a place where you would be happy starting your career then take the TT offer.