Education plays a key role in knowledge society, since, from a meritocratic perspective, it opens up fair opportunities for well-paid jobs, thereby increasing social mobility and well-being more generally. In order to foster their economic competitiveness, cities are therefore encouraged to engage in knowledge-based urban development by trying to provide good schools and world-class universities to attract the “creative class.” However, meritocracy is a “myth,” as access to educational opportunities is itself socially biased. With the example of Heidelberg, a so-called “knowledge pearl,” we show how knowledge-institutions, such as the university, may shape socioenvironmental contexts in ways conducive to spatially selective access to—and use of—educational opportunities. Instead of reducing social polarization, knowledge-institutions may instead (re-)produce inequalities.