Quite right, there will be Polymer, and a lot more sprite work for scenery/character on the street.(The interior lighting for KTIT will be much more atmospheric and contrast with the exteriors quite nicely.) Even a few custom actors with some movement. Like actual in-map car sprites and stuff.
The day time is a conscious choice on this one, as the initial events all take place in the afternoon, during the summer time, in and around the beaches of San Francisco.(Borrowing some of the stuff from Duke Caribbean again) It's partially there to help contrast what comes later.
The story will move later into the evening/night when Duke is sent in to take care of business under cover of darkness.
If you look at the E1 backdrop for Duke Nukem 1 you can see where i've taken some vague inspiration from.
Working with some early interior polymer lighting for the radio studio.
Building up more of San Francisco:
Geography is no doubt a little exaggerated and wrong, but we have Golden Gate bridge, with Alcatraz in the BG. A cute little boat riding by in the foreground, which I want to hook up to a train path so it can putter on by.
Another shot of the bridge, this time from a beach. Playing with forced perspective and some visual trickery.