The year can be around the present. As for the city I reckon Sydney Australia would be perfect. (not just because I was born here) It is the perfect scenario, A busy CBD area, A huge busy harbour with quiet bays and rivers with islands around, Beach areas (bondi, manly), suburban areas. It would be Awesome! But not only in sydney, the possibility to travel to and from somewhere like new york would be great having your crime family situated in new york and you being a new "manager" in that crime family looking after sydney. So having two major cities being quite different to each other would give you a choice of whatever you like. There should be a huge variety of gangs, Triads, russians, lebanese, G-unit, islanders, and all the cars should be real models. IT WOULD BE THE PERFECT GTA!!!!
Oh yeah. You also have the monorail and tramlines and trains and ferries and buses and planes and all kinds of public transprot you can use or steal:)