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The majority owner of the Washington Wizards and Capitals, Ted Leonsis, told a crowd in December he had \u201cgoosebumps\u201d at\u00a0the thought of moving<\/a>\u00a0his NBA and NHL teams from Washington to Virginia, \u201cif all goes as planned.\u201d<\/p>\n It did not.<\/p>\n Leonsis\u2019\u00a0handshake deal<\/a>\u00a0with Republican Gov. Glenn Youngkin to relocate the teams to a taxpayer-backed arena in Alexandria\u00a0collapsed Wednesday<\/a>, weeks after a bumpy\u00a0slog of a defeat<\/a>\u00a0in the Virginia General Assembly. Leonsis, apparently not willing to wait for a second shot in Virginia, reemerged in Washington, which had offered his Monumental Sports & Entertainment a more than half-billion-dollar arena deal to stay.<\/p>\n The demise of the project, a top priority for Youngkin, set off an extraordinary round of bitter recriminations among Virginia officials and companies that were parties to the deal, including allegations of possible impropriety and slander. It also sparked fears about impacts to the state\u2019s future economic development prospects.<\/p>\n \u201cWe made mistakes. I know the governor made mistakes. Monumental made mistakes. JBG made mistakes. And I\u2019m sure the General Assembly made mistakes,\u201d Alexandria Mayor Justin Wilson said of the key players.<\/p>\n The outpouring of blame began when Alexandria announced the negotiations were over Wednesday, in a statement that expressed disappointment in \u201cwhat occurred between the Governor and General Assembly.\u201d<\/p>\n Democratic leaders of the General Assembly blamed Youngkin.<\/p>\n \u201cHe mismanaged the process,\u201d said Senate Majority Leader Scott Surovell, who had agreed to sponsor legislation underpinning the deal. The legislation called for a quasi-governmental entity to issue bonds to finance most of the project, repaid through a mix of projected tax revenues recaptured from the development. Surovell\u2019s bill\u00a0never made it out<\/a>\u00a0of his own chamber \u2014 due to opposition from one of his colleagues, powerful budget committee chairwoman L. Louise Lucas \u2014 even though a companion bill passed\u00a0the House of Delegates<\/a>.<\/p>\n House Speaker Don Scott faulted the governor for bringing the Legislature into the conversation too late in the game.<\/p>\n Youngkin told The Associated Press in an interview he believed \u201cpolitics and personal agendas\u201d in the Senate had derailed what he\u2019s called the single largest economic development deal in Virginia\u2019s history.<\/p>\n Leonsis, in a news conference with D.C. Mayor Muriel Bowser, took a couple of jabs at Virginia. Meanwhile, JBG SMITH, a real estate company and partner to the deal as the proposed developer, unleashed.<\/p>\n In a statement, JBG CEO Matt Kelly questioned the motives of key Senate leaders including Lucas, who had stymied the legislation and\u00a0gleefully<\/a>celebrated its<\/a>demise<\/a>\u00a0on social media. Specifically, JBG questioned whether the arena was blocked as part of a \u201cscheme\u201d to benefit a competing developer, Comstock, that had been pushing for\u00a0a northern Virginia casino<\/a>. Kelly\u2019s statement did so without mentioning any lawmaker or company by name, but while including enough context to make the criticism understood to people following the matter closely.<\/p>\n Kelly said the deal was derailed due to \u201cpartisan politics.\u201d Without offering proof, he also suggested the outcome was influenced by \u201cspecial interests and potential pay-to-play influences within the Virginia legislature.\u201d<\/p>\n There was, in fact, an 11th-hour pitch to combine the casino and arena, Surovell said. But it was just one of a number of suggestions he made over the course of the session to try to salvage the arena deal, he said.<\/p>\n Lucas\u00a0said on social media<\/a>\u00a0that \u201cthe incompetent losers behind the effort are out telling lies and conspiracy theories\u201d instead of admitting their own failure.<\/p>\n Comstock CEO Chris Clemente told AP the idea of pairing the casino with the arena had been bandied about by lawmakers of both parties. He rejected the notion that there was any kind of coordinated attempt to hold off the initial arena deal in favor of an arena-casino pairing, calling JBG\u2019s statement \u201cslanderous\u201d and \u201cridiculous.\u201d<\/p>\n Wilson, the mayor, said in an interview that Richmond\u2019s opaque legislative process erodes confidence. He cited the work of political consultant Ben Tribbett, who is paid by both Lucas and by Comstock, as creating an appearance of impropriety that casts doubt on whether the Legislature was acting in the public interest.<\/p>\n \u201cI find the whole thing unseemly,\u201d he said.<\/p>\n Tribbett said that it\u2019s not unusual for a consulting business to advise many kinds of clients, and that each of his clients\u2019 interests are kept confidential.<\/p>\n \u201cIf you\u2019re an architect, it\u2019s not a conflict to work on multiple buildings. And if you\u2019re a political consultant, it\u2019s not a conflict to work with multiple political clients,\u201d Tribbett said.<\/p>\n A number of other factors contributed to the Alexandria project\u2019s demise, according to interviews with lawmakers and others close to the deal-making, who for months described the talks as chaotic, or worse.<\/p>\n Youngkin never enjoyed vocal support from Republican legislators, who mostly kept their heads down as the deal imploded. The project also faced well-organized local opposition.<\/p>\n Alexandria\u2019s economic development director, Stephanie Landrum, said the failure to close the deal because of what she sees as politics will cause other prospective businesses looking to come to the commonwealth to question whether to come to Virginia.<\/p>\n But Greg LeRoy, executive director of incentives watchdog Good Jobs First, said it\u2019s laughable to think that turning away a sports team seeking public financing will hurt the state\u2019s business climate.<\/p>\n \u201cOther regions would kill for a business climate like northern Virginia\u2019s,\u201d said LeRoy, whose organization opposed the deal.<\/p>\n Youngkin said Virginia deserved better than the way things panned out, but he understood why Leonsis moved on.<\/p>\n \u201cEventually you\u2019ve got to go negotiate something else. And, boy, did D.C. provide him with a remarkable alternative,\u201d he said.<\/p>\n<\/div>\n\nSubscribe to the CFO Daily newsletter to keep up with the trends, issues, and executives shaping corporate finance. Sign up<\/a> for free.<\/div>\n