Disaster that's a hit in City (8)
I believe the answer is:
calamity
'disaster' is the definition.
(synonyms)
'a hit in city' is the wordplay.
'hit' becomes 'lam' (to 'lam' means to hit hard).
'in' is an insertion indicator.
'a'+'lam'='alam'
'alam' placed within 'city' is 'CALAMITY'.
'that's' is the link.
(Other definitions for calamity that I've seen before include "A sad or disastrous happening" , "Musical set in Deadwood" , "15 [JANE] the frontierswoman" , "Event resulting in great loss and misfortune" , "Catastrophe" .)