Dylan Byers has the news over at Allbritton-owned Politico:

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.”

Or, as Hamilton Nolan put it, “Or even, hopefully, something better.” It’ll be very interesting to see how this rolls out. Politico is both local (D.C. politics) and national (um, D.C. politics). The Allbrittons’ previous experience with purely local online-born content, TBD, had a buzzy, controversial, and ultimately short life.

Capital is more local than Politico — anecdotally, it’s mostly the occasional media story that reaches a substantial audience outside the tri-state — but could use its location in New York to shift in a more national direction if it wanted. (Gawker, after all, was once much more New York-centric than it is today.) But at first glance, it would seem the unusual characteristics of the successful Politico model — the giant flows of lobbying money circulating around town, the ad success of the print product, the niche possibilities of Politico Pro, the national interest in its subject matter — will make it hard to use the same tricks with Capital. So, new tricks!

Capital’s Josh Benson (no typo relation) and Tom McGeveran write about the deal on their site (the commenters don’t like it, but what would you expect?):

Our upcoming expansion comes courtesy of a deal with Robert Allbritton, who owns POLITICO and has acquired Capital with the intention of establishing and growing it as a free-standing sibling publication in New York.

What the new investment does, for one thing, is to 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.

We’ll be announcing a substantial number of additions to the Capital editorial staff in the coming weeks, as well as some changes to the site. We’ll immediately intensify our existing focus on politics and media, building on the excellent work of Dana, Joe, Azi, Reid and Gillian and our regular contributors, and we’ll also be growing our coverage of culture and other areas vital to a publication purporting to cover New York.