Is around Le Figaro' s locality (7)
I believe the answer is:
seville
'figaro' s locality' is the definition.
(location where the opera is based)
'is around le' is the wordplay.
'is' becomes 'lives'.
'around' says the letters should be written backwards.
'lives' in reverse letter order is 'sevil'.
'sevil'+'le'='SEVILLE'
(Other definitions for seville that I've seen before include "Capital of Andalusia" , "Rossini opera 'The Barber of ....'" , "city taken by Moors" , "Spanish city is level" , "Fruit for marmalade" .)