Mexico City is a terrible, horrible, no good, very bad idea.
I think relocation would be a better option than expansion. I think the loser straw would go to Tampa who has a crap stadium and the worst attendance in the league. Plus, there is a built in divisional Canadian rivalry with the Jays. It could be a good move for the A's too. If Cleveland wasn't an "historic" team, I could see them being moved as well.