Wizards, Capitals' $2.2 billion deal to move to Virginia falls through

The Washington Wizards and Washington Capitals are no longer moving from D.C. to Virginia, three months after owner Ted Leonsis and Virginia Gov. Glenn Youngkin announced plans to build the teams' next arena in the Potomac Yard neighborhood.

Per the Washington Post, the city of Alexandria, which includes Potomac Yard, said Wednesday it has stopped negotiations around the proposal and will not move forward with the project.

Youngkin and Leonsis had only announced a handshake agreement in December to build the arena as part of a $2.2 billion mixed-use development. The deal had initial approval from the Virginia House of Delegates, but the proposal reportedly never passed in the Senate and wasn't included in the state's budget.

From the Post:

In the statement, the city said the proposal was "worthy of community discussion and Council consideration," but that it was "disappointed in what occurred between the Governor and General Assembly."

This is only the latest chapter in what has been a particularly contentious battle over the future home of the Wizards and Capitals, and wasn't without foreshadowing. Leonsis was reported to be in talks with Maryland Gov. Wes Moore about a possible arena just last week, which isn't something you do when the Virginia plan is going as hoped.

Before that, Leonsis had asked D.C. for $600 million in public money last year to renovate the teams' current home of Capital One Arena, reportedly with plans to move seats, a new food court and a new entrance at Seventh and F streets. Months of negotiation between Leonsis and D.C. mayor Muriel Bowser went nowhere.

Reportedly at issue was a cap on D.C.'s ability to borrow money, until a refinancing of the city's debt freed up more money in December. Bowser's office reportedly approached Leonsis with a $500 million offer, but no agreement emerged. One day later, Leonsis was in Alexandria, announcing the Potomac Yard deal.