I ran a "heavily" modified version of it in Waterdeep, with the warrens as a "closed off" section of Undermountain. The factions were Inverted Pyramid: Khelben just got going, in partnership with the head of the Church of Mystra. The noble families were simply noble families from Waterdeep. Change the paladin order to be from Tyr. Use the Pactlords verbatim, they rule.
If you're in Daggerdale now, I'd probably suggest one of the cities north, perhaps off of the Moonsea.