Local News Site Capital NY Raises $1.7 Million, Staffs Up

Capital New York, a year-old news site that covers “how things work in New York,” has raised $1.7 million and is staffing up, including three new hires from the Observer. Update: The company also announced today that it is hiring Joe Pompeo, a media reporter at Yahoo (NSDQ: YHOO) News.

Capital New York was founded last year by two former Observer editors, Josh Benson and Tom McGeveran. The funding is from angel investor Adam Riggs, the former president of Shutterstock.com. Riggs will sit on Capital’s board along with Messrs. Benson and McGeveren and Curbed founder Lockhart Steele, AdAge reports.

With the funding, Capital NY said, it will increase reporting and add engineering and sales staff. It plans to add advertising later this year. The company recently made three hires from the Observer: political reporter Azi Paybarah and, according to NY Mag’s Daily Intel (NSDQ: INTC), political reporter Reid Pillifant and Dana Rubinstein, who primarily covers real estate. Bianca Janosevic, who was previously the New York Times (NYSE: NYT) Digital marketing director, is president.

Update: The Huffington Post reported today’s hire of Joe Pompeo, who has been a media reporter at Yahoo News and was previously at the Observer and Business Insider. He’ll cover New York media, including stories like “the battle between the Greater New York section of the Wall Street Journal (NSDQ: NWS) and the metro reporters at the New York Times, the tabloid wars, alternative press, network TV news affiliates, and 24-hour network NY1.”