[pwg]

> hit pieces against local Democrats or praise for local Republicans.

This suggests another possible reason. Those behind them have found that if the 'fake' site appears to be 'local' enough, it will be seen as more reliable and/or it is more likely to get "liked" (given your "spread via Facebook posts"). Possibly their A/B testing has shown that fake 'local' stuff gets more spreading on FB?

[wtallis]

I don't think that's "another" possible reason so much as you're closing in on the original accusation. The reddit group linked upthread refers users to this article explaining these sites: https://www.nytimes.com/2019/10/31/upshot/fake-local-news.ht...

All you're missing out on at this point is the obvious partisan motivation.