Hi Andrew,
Its tricky I can see your option might seem like the ideal route. However what if that location suddenly becomes active again? It seems a waste to 301 redirect it then create a new URL later, also you end up creating more work for yourself doing it this way. What I'd do is keep the location pages open and keep doing what you've been doing e.g. linking to other closely related locations. Another thing to consider is the redirected URL might stop in the SERPS for a while, even though you've redirected them!
