EXCLUSIVE: This news will have reverberations throughout the New York media world. In a phone call just now, Peter Kaplan tells me he has tendered his resignation as Editor-in-Chief of the New York Observer effective June 1st. He says he has no job lined up after 15 years atop the paper. “It’s a lifestyle choice,” he said. “I want to take care of Lisa and the kids.” [Lisa Chase, an editor at Elle magazine, is his life partner.]

The news comes after Gawker posted today about “rumors” that the New York Observer‘s owner Jared Kushner “would like an elegant, face-saving exit from the failing newspaper business, and that he’s had talks with Politico and Huffington Post about buying or merging with the Observer, but neither one has bitten.”

First, some transparency. Kaplan has talked to me repeatedly about wanting NYO to buy my website since I began DHD 3 years ago. The NYO named me Media Mensch Of 2007. I was the NYO’s first and only West Coast Editor and Hollywood columnist from 1995 to 1998 when I left to take a better paying gig. As a result, I’ve been privy to much of Kaplan’s frustration at the newspaper which used to be well read and well respected and nowadays is barely noticed and hardly quoted. None of that has been Kaplan’s fault. It’s Kushner’s.

Of course, Peter’s predecessor as editor-in-chief, Graydon Carter, put the Observer on solid journalism footing with the full engagement and encouragement of then owner Arthur Carter [no relation], a very rich New Yorker who wanted to publish a very smart newspaper for NYC elites. Then Susan Morrison did an editing stint. But Kaplan quickly put his own stamp on the publication by making it more provocative. People may forget that he was editorial director of the absolutely best business magazine ever, Manhattan Inc., about which The New York Times said: “Readers were attracted by articles that took a sometimes titillating look at the powerful people making news in New York’s supercharged business climate. Advertisers liked the magazine’s rich demographics. Subscribers tended to be the same kind of people that the magazine writes about – big income business executives.” That’s what the New York Observer also became under Kaplan.

But Peter was hampered not just by a small circulation but also by a miniscule editorial budget. His staff was paid poorly, and one great byline after another eventually found more lucrative jobs at the best media outlets. To Kaplan’s frustration, the NYO quickly became a feeder of talented journos for The New York Times. To counter that, Kaplan also hired on the cheap seasoned reporters and columnists who for no good reason were between gigs. Their voices added heft and import to the paper’s content.

As the Observer became mediacentric, other media were noticing. I recall one conversation with about-to-be NYT editor Howell Raines where he griped that the Times was “giving up too much ground” to the Observer and vowed to change that. Ironically, the NYO‘s coverage of the Jayson Blair uproar, and Raine’s firing, was stellar. One of the principal reasons was that Kaplan encouraged his staff to be provocative in a way that other papers couldn’t. Peter was the first boss who encouraged me to write any and all criticism about the Hollywood moguls. (“Just write what you know,” he said.)

There was a time in the late 1990s/early 2000s when the Observer under Kaplan looked ready to expand its reach across the country. Then 9/11 happened, and the paper never recovered from the financial crisis that enveloped NYC in the aftermath. Kaplan perservered despite the belt-tightening dictum. But the quality of the staff and articles declined. Arthur Carter eventually decided he liked metalwork sculpting more than owning a money-loser newsosaur.

Peter was in a flopsweat panic as one potential suitor after another, including Conrad Black pre-disgrace, didn’t buy the paper. There was even talk that it would fold over Memorial Weekend 2006 after a deal with the trio who started the Tribeca Film Festival — Robert DeNiro, his producing partner Jane Rosenthal and her venture capitalist husband Craig Hatkoff — fell through.

Then, miraculously, that July, Kushner showed up and took over. A kid with a real estate rich family and a dad in the slammer, Jared was not a natural newspaperman. Naturally, Kaplan was nervous about the new owner. Carter had certainly involved himself in the paper’s editorial product, but Carter’s best quality was that he didn’t give a damn about who his editors and writers pissed off.  Kushner — aka Young Prince Callow — wanted to ramp up the real estate coverage, attract a younger readership with pablum about celebutantes (he was dating and is now engaged to Ivanka Trump), and put more emphasis on the website than the paper more.

Kaplan went along with the plan. But the truth is something died inside Peter when those changes were made to dumb down the Observer. He knew great journalism, and he knew his paper wasn’t ever going to deliver it again. [Take, for example, its Hollywood coverage now penned by newbies whose noses are pressed to the glass from 3,000 miles away and whose knowledge comes from watching a season of Entourage. Case in point: today’s article by the paper’s former real estate writer purporting to examine showbiz media. It’s sloppy and stupid and contains quotes out of context, stenography instead of reporting, accusations made without backup, etc.]

Kaplan also realized that he should have spent less time in the newsroom and more time looking for that next bigger and better job. He would have killed to become editor of The New Yorker, the perfect media outlet for him, but he was too proud to campaign hard. He should have become editor of Conde Nast’s Portfolio, and still could because it’s dreadful under Joanne Lipman, but he won’t promote himself to Si Newhouse. So, for now, one of the more interesting newspaper editors will spend more time with his family.