Having done Uvirith's Legacy, it's not too difficult to make this kind of mod fully compatible with LGNPC and other major mods. You just have to be careful about not stepping on the other mod's toes. I had to take two into consideration, LGNPC Tel Uvirith and RoHT, and worked together with their respective modders to ensure full compatibility. The best way to make a mod like this compatible is to limit touching areas already fully covered by these mods, and work around them in other cases. Working on a massive Bal Isra expansion, it stands to reason that there should be lots of new quests for the Archmaster to do. However, I suggest you do play through LGNPC Pax Redoran to see where you can compliment it and where the LGNPC line ends so you have free reign. A lot of people use it, so full compatibility will be a major concern.
I'm not saying you have to tiptoe around LGNPC, but work with it so that you mod can either stand alongside it or alone and the player won't know the difference. When players can play both mods at the same time and feel they mesh together so seamlessly that it all seems like it should have been in the original game, then you have succeeded. Sure, you can have a successful mod, like BuUG, that pretends it's the only great house expansion out there and doesn't give a damn if it breaks LGNPC quests, but then someone's just going to come along and make a new version (BuUL) that does integrate with other mods and everyone will go play that instead.
Here's an example: a while ago I altered the NPC Mallam Ryon, causing him to potentially attempt an assassination of the player. However, Mallam Ryon was also altered significantly by RoHT. Because Mallam Ryon was essential to RoHT, using this NPC at all would cause major conflicts. I decided to drop Mallam Ryon entirely, and instead made a new NPC to serve my purposes in UL.
Another example: LGNPC Tel Uvirith involves the outer Tel Uvirith retainers to such an extent that any dialogue I want to add to them is handled in self contained topics, to ensure their LGNPC greetings are not messed with in any way. I would not alter the actual NPCs or their scripting either. The greetings can also be handled by careful filtering, making sure your greetings are only overriding LGNPC greetings when certain quests are active for example. Loading LGNPC while ordering dialogue helps place your dialogue above or below theirs as appropriate as well.
In cases where I need to do something scripted with an NPC that might be in conflict with LGNPC or other mods, there's a few ways to handle it so you don't need to alter their scripting: Placing an activator in the room targeted to the NPC for different purposes, starting scripts via dialogue (as I have done with one NPC to avoid conflicts with LGNPC Secret Masters), and using global instead of local variables to track things happening where a Journal Entry is not feasible.
Sometimes it's appropriate to claim an NPC as your own. In such cases, it's a good idea to check previous claims, but if this NPC is relatively free, stake your claim and make sure other major mods that target this area know about it. Another example, Fast Eddie is a major Telvanni player who is dominated by UL, and LGNPC has accommodated that while RoHT barely touches him. So even though LGNPC makes up the bulk of his new dialogue, his scripting is UL's as are almost all of his quests.
While you're taking a look at LGNPC, make sure to take a look at their dialogue. Check out LGNPC Indarys as Ostar suggested, and try to tailor your dialogue for those characters to match. It will make the immersion even stronger.
As Gaius mentioned, NoM compatibility is another major thing you'll want to consider, as is Bathing Mod compatibility. When adding a bathroom or a kitchen, it's actually quite simple to add these mod's resources, and a lot of realism players will appreciate it.
Bal Isra has needed an overhaul like this for a long time. I'm really glad someone's taking it on, with the intended scope of all the Telvanni mods available to boot! Godspeed gentlemen! If you ever want to use any scripting from UL, or just some specific advice, please let me know. I would be happy to help.
Now for some opinions. I think it would be a good idea to focus on expanding Bal Isra as the primary function of this mod, and gradually bleed your way out into the rest of the Redoran as you think of things to do and become more familiar with what's already available. That way, should you run into any problems (it's usually finding the time when RL stuff happens), you will still have a great stronghold expansion as a solid base that people will want to play regardless of massive sweeping questlines and such.