Do bear in mind that whoever gives you some suggestions they are going to be only that - their own suggestions. Because no-one here has ever written a game as complex, large or as involved as GTA Vice City, and as no-one here worked on GTA either, they won't know how the game actually handles everything.
I would say almost certainly there is no way you'd have the whole city as a single .X file - think about how large it would have to be and the size of the texture alone! Break it down into smaller chunks, think smaller, work smaller.
"I am not young enough to know everything."
- Oscar Wilde