Local news cooperatives are now in development in San Diego, Chicago, Hawaii and San Francisco. The latter, known as The Bay Area News Project, is building up with a $5 million investment from philanthropist Warren Hellman, who apparently thought it would be a better idea to start fresh than buy The San Francisco Chronicle.

According to an article by James Rainey in the Los Angeles Times today, the 15-person BANP (a placeholder name) envisions potential revenues of $12 million a year with a four-pronged strategy developed by CEO Lisa Frazier, a former McKinsey consultant who is getting paid $400,000 a year.

Revenues are expected to come from multiple sources, including public radio style members and syndication payments from news outlets that use the project’s content. The New York Times, for instance, has lined up to run stories twice a week in its Bay Area edition (as it has in Chicago as well).

The site has snared New West founder and Industry Standard Editor Jon Weber as its editor. It will rely partly on paid interns from UC Berkeley, and is operating out of donated law office space. We’ll follow it — and the others — with interest. With enough of a bankroll, and much lower costs, there is no reason why these sites can’t compete against newspapers, win new types of users and advertising, and save the day for journalism.

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