Virginia Beach has abandoned its pursuit of the Sacramento Kings.
"This just ain't gonna work at this point in time," the city's mayor, Will Sessoms, told The Bee.
Sessoms had imposed a Monday deadline for reaching a deal.
The city and arena developer Comcast-Spectacor issued a joint statement saying they haven't "reached a level of progress that will allow the city to go before the General Assembly to request the necessary funding."
"We can't move forward because Comcast has not reached a deal," Sessoms told The Bee.
he Maloofs' interest in Virginia Beach has been widely reported since August.