Yeah, companies like Starbucks are notorious for pulling crap like that. It sounds like this might actually be a mixed blessing for you. If the idea is already upsetting your neighbours, it sounds like they're supportive of local businesses and just by choosing to exist in the same neighbourhood, Starbucks is helping you ossify loyal customers. At the same time, Starbucks is insanely popular and they get BUSY. During their peak hours, they'll have lines out the door. This could be an actual win for you, because once people start to know that you exist, during those peak times they won't want to wait at Starbucks so they'll come to you. I can honestly say, half the time my lunch decision is based solely on which restaurant seems the least busy at the moment. Shit. That sounds like shooting fish in a barrel right there. Have you thought about what you'll do to market to those students? Like maybe an open mic night or something?You'll like this, Starbucks trying to negotiate the purchase of a plot of land down the block from my shop. Lots of neighbors are unhappy about it but I've repeatedly said there is plenty of room for me and a charcoal water shop in the area.
Don't think I've mentioned it but there is also a 5000 student Catholic University near by to which I'm the closest coffee shop not run by their commissary.