City with great watering hole (7)
I believe the answer is:
tallinn
'city' is the definition.
(Tallinn is an example)
'with great watering hole' is the wordplay.
'with' says to put letters next to each other.
'great' becomes 'tall' (I've seen this before**).
'watering hole' becomes 'inn' (I've seen this before).
'tall'+'inn' is 'TALLINN'.
(Other definitions for tallinn that I've seen before include "European capital" , "Capital of Estonia" , "Capital on the Gulf of Finland" , "Estonian city" .)