Imposing area around a Spanish city (7)
I believe the answer is:
granada
'spanish city' is the definition.
(I've seen this before)
'imposing area around a' is the wordplay.
'imposing' becomes 'grand' (I've seen this before).
'area' becomes 'a' (maths abbreviation).
'around' means one lot of letters goes inside another.
'grand'+'a'='granda'
'granda' going around 'a' is 'GRANADA'.
(Other definitions for granada that I've seen before include "Spanish city, site of the Alhambra" , "sunny city" , "City of Andalusia" , "car in > Spanish city" , "Andulasian city" .)