In flawed democracies, such as the Republic of Georgia, legal exceptions for urban megaprojects are becoming a standard mode of governance. While frequently analyzed as singular, top-down sovereign acts, I argue that the imposition of such exceptions is a complex and dispersed process. Drawing on the case of the Panorama Tbilisi megaproject introduced in 2014 in Tbilisi, Georgia, this article reconceptualizes the urbanism of exception as a governance strategy engineered through intergovernmental rivalry and institutionalized political loyalty. Through a qualitative analysis, I show how rivalry between national and local governments controlled by opposing political parties led to the strategic rewriting of national law to bypass local opposition. Furthermore, I demonstrate how political loyalty functions as a governance tool, blurring public-private boundaries and ultimately culminating in the promotion of project executives to high-level state positions. The article contributes to critical urban theory by revealing the contested nature of state power in megaproject implementation and proposes the concept of the commodification of exception: the centralization of the right to bypass rules as a tradable asset available exclusively to political and economic elites.