is there a way to modify the parameters for importing shape files, so it will allow larger files? I ran into an error message "data extent too large. Reduce the extent of the data". I need the file to stay the size it is, and get it imported.
No, sorry, this is not possible if the data extent is in fact too large.
There is a limit to the extent of the scene that can exist, and this limit is about a couple hundreds of kilometers, which should be sufficient for large scale cities. If the data extent is larger than this limit, then the data cannot be imported into a single scene. If the data extent is not so large but it is more than a couple hundred kilometers away from the existing data in a scene, then this will also not work.
If it is an option for you, you could try to make multiple different scenes for the data. If you can put your data in a FileGDB, then when importing the FileGDB, you can specify the extent of the data you want to download.
Another approach is when you get to this regional scale is to change the frame from which you are presenting by using batch generation workflows (focus on the facility/neighborhood rather than the whole region). There are scripts located here that might be helpful for this. At some point it actually makes sense break down the data into zones/batches for import and display.