I've not seen Zootopia -- but it seems it is naughtazoo but it brings up Zoo in a park that is naughtazoo. Eh, guess that's why I try not to overthink any of it.
I guess a city near the Dino institute could be as real as a ride side attraction with a cute backstory -- on the way to the Nemo theatre -- I'm just not sure what doesn't work in that area (considering currently the big carnival ride is closed at the ride side attraction). Anyway, to me, currently I would rather see them replace Dinoland before building on a new plot.