Do you have enough scrap etc in order to complete the upgrade? Seems a bit odd that it says ready for upgrade, but no option at the desk! You could try setting the upgrade to auto , as a test, then see what happens! Problem with that, apart from the fact you don't really want to do it, it doesn't explain why the option isn't there in the first place. But it may at least give a indication to whether it really is ready to upgrade.
Another possible "try out" is go to say, home plate, or some other internal cell (Fallons in diamond city, or pipers offices maybe), and wait for a few days, (sleep or sit and wait) and see if the scripting all catches up etc. Then see if your city is up-gradable.
I have found after reading many issues here, that waiting in an internal cell does help with many issues that are affected by scripting and building etc. Many times I have thought "my game is broken due to this or that", and then, after waiting in an internal, it seems to stabilise. (This statement is not meant as anything other than "I feel your pain")