One newspaper in US city that's smart (5)
I believe the answer is:
nifty
'smart' is the definition.
(nifty can mean stylish)
'one newspaper in us city' is the wordplay.
'one' becomes 'i' (Roman numeral).
'newspaper' becomes 'FT' (Financial Times newspaper).
'in' is an insertion indicator.
'us city' becomes 'NY' (short for New York).
'i'+'ft'='ift'
'ift' put into 'ny' is 'NIFTY'.
'that's' acts as a link.
(Other definitions for nifty that I've seen before include "Fast and neat" , "Clever; stylish" , "Particularly good (informal)" , "Dandy" , "Stylish, nimble" .)