In an ambitious play for the New York market, POLITICO publisher Robert Allbritton has purchased the online news site Capital New York, with plans to make “a substantial investment” in the business and more than quadruple staff.

Capital, which was launched in 2010 by former New York Observer editors Josh Benson and Tom McGeveran, will now be led by POLITICO co-founder and executive editor Jim VandeHei, who will serve as president while remaining in his current role at POLITICO. Benson and McGeveran will remain co-editors.

The acquisition is Allbritton’s first since he reached an agreement to sell his television holdings in July. His goal: to apply the POLITICO business model to New York City and “focus laser-like on New York and its power centers, including the media, city and state politics, culture and business.”

“I have very big ambitions for this publication: to do in New York what we did in Washington with POLITICO,” he wrote in a memo to POLITICO staff late Sunday night. “We are making a substantial investment to sharpen the focus of Capital and vastly expand its reportorial presence.”

To that end, Allbritton is planning to hire more than two dozen people in the coming weeks — Capital currently has eight employees, including a managing editor and four full-time reporters — and to relaunch the website in the fall.

With reporters deployed across Manhattan’s power centers as well as up in Albany, Capital will now go head-to-head with The New York Times, The Wall Street Journal and the New York City tabloids. Whether it can succeed in such a saturated market is an open question.

In a statement, VandeHei said the goal is to make Capital “the essential news source for and about the most powerful people in New York — the officials who run government, politics, business and media.”

“We will provide the fastest, clearest, most essential reporting on these topics alone. We are confident we will do that. If we do, the readers will come – and the ads and subscriptions will follow,” he said.

Like POLITICO, Capital’s business model will rely on ads and subscriptions targeted at what Allbritton described as “the most influential readers in the core subjects it will cover.” There are no plans to launch a print edition.

Allbritton did not disclose and VandeHei declined to discuss the specific financial aspects of the acquisition, noting that it was a private transaction and a privately held company.

In a memo to Capital staff, Benson and McGeveran said the acquisition “put this publication on a stable financial footing, ensuring our ability to deliver quality local coverage over the long term. It also gives us the wherewithal to be much more ambitious than ever before about our editorial mission, which is to be a primary source of reporting for knowledgeable readers on the workings of the greatest city in the world.”

Benson and McGeveran will continue to run the publication day to day while “drawing on our shared experience and expertise,” Allbritton wrote in his memo. “The trick for me is smartly using POLITICO talent to help lift the new publication without putting our own success at any risk. I have come up with a solution that works well for everyone.”

VandeHei will remain in Washington, where he will continue to chart the strategic direction for POLITICO. Katherine Lehr, POLITICO’s executive director of editorial operations, will move to New York where she will serve as Capital’s Vice President of Operations. Cally Stolbach, the director of sales strategy and operations at POLITICO, will join Capital as Director of Business Development, and split her time between Washington and New York.

Noting the recently announced plans for a new POLITICO Magazine, the addition of columnist Todd Purdum, and the launch of three new POLITICO Pro verticals, Allbritton told staff the company is “in the middle of the biggest expansion of POLITICO since our inception.”

Allbritton is expected to formally announce the acquisition in a press release on Monday morning.

Source: Politico.com