I saw this on The Stranger's SLOG blog, tipped by a tweet from Jay Rosen (jayrosen_nyu).
Community ownership seems preferable to the "endowed" newspaper folks seem to envision as an alternative to market-based enterprises. It would presumably have more standing in the community than an olympian, insulated non-profit (though what the community owns could itself be a non-profit, of course).
I doubt sufficient community support could be found for a second paper in a two newspaper town, but if San Francisco (for instance) lost its only daily, that might be different.
Here's a taste of The Stranger's suggestion:
One model under consideration is the so-called Packers Model—as in the Green Bay Packers, "the only non-profit, community-owned major league professional sports team in the United States." (A model that, I just realized, Jonathan Golob first floated here on Slog on January 9th, the same day that Hearst announced it would likely be shuttering the P-I's print edition.)