Steve Outing has a number of recommendations for building the ideal news web site over at Editor & Publisher. They mostly seem like old hat to me since we've tried a bunch out in the New Media capstone project. The key underlying theme though, get quality community contributed content, is still one near and dear to my heart.
Herewith, my 2 cents worth.
First, fill the search box with local shortcuts. Yahoo! has them for all sorts of stuff, why not add shortcut keywords for "coupons", "restaurants", "bears" (if you're in Chicago). Sure you have sections and menus to indicate focused navigation, but this would be another opportunity to add features in a place where you know a lot of people wind up. Also, your regular local folks will learn this interface and the site will be stickier for local information.
Second, focus user contributed content efforts within time limited contests that potentially use archival material. Have a weekly, "This Day In...", contest where folks can tell stories around a set of articles and photos from the archives. In college towns, have photo contests for homecoming. Win-win, all the way around, and if you can't sell sponsored advertising on top of this, shame on you!!