AG7, glad to have you on board with the Challenge! The more the merrier.
I think there are many possible ways of developing a city map, since it is a more complicated challenge than a regional or world map - I don't think there is a wrong way to approach it. Your method seems viable to me.
As Mmmmmpig states, I like all the different styles and methodologies to getting the results you want.
I look forward to how this map progresses. Good luck!