Hi...
I have done this entire process... So, yes it can be done...
In my Whistler project I used local correct building models from google and put them exactly where they belong...
There are a few tricks.
First off you need to experiment with which is the best type of DAE file.
And... yes... the texturing is the toughest part...
One type of DAE helps minimize the re-texturing work...
Also, when you do find the best type of DAE and get it into MED YOU WILL WANT TO CHANGE THE JPG textures to TGA files. That will reduce the file size greatly...
It has been quite awhile since I did all that...
But what I wrote should help a bit...
Best of luck...