On a cool sunny afternoon in November 2020 — surrounded by key cabinet appointments — Albuquerque Mayor Tim Keller unveiled a project he said would be a “game-changer” for the local aerospace industry.
“When we heard about this project, No. 1, the numbers were staggering,” Keller said behind a podium placed on a large, vacant plot of land. “We almost thought it was too big to be true.”
The company behind the project, Washington, D.C.-based Theia Group Inc., wanted to launch a network of satellites to gather imagery and data that would inform border security, natural resource exploration and more. And, to the excitement of Keller’s administration, Theia Group wanted to put a massive multi-use campus near the Albuquerque International Sunport. Called the Orion Center, it’s where Theia Group wanted to build and test its satellites.
The proposed development, as described in materials provided to the city as the project unfolded, would have been monumental for Albuquerque. Plans for the Orion Center included millions of square feet in construction and around-the-clock operations. Perhaps most importantly, the development promised to create thousands of jobs.
How much money would Theia Group sink into New Mexico? Billions of dollars — a truly stunning amount; on par with companies like Google and Apple. But in December, some eight months after city councilors approved a proposed land lease and development agreement for the Orion Center, the city announced it had walked away from the project.
To figure out why and how the Orion Center came to a halt, Albuquerque Business First conducted interviews and combed through court filings, emails and other city and state documents obtained through public record requests.
The documents reveal that — on the surface — Theia Group’s plans for Albuquerque seemed like an unprecedented boon for the state’s aerospace sector. However, the documents also show how — behind the scenes — lawsuits and financial issues across the U.S. had hamstrung the startup as local officials pressed for Theia Group to finalize the lease.
Today, the possibility of Theia’s multibillion-dollar development and the potential for thousands of local jobs has vanished. A court-appointed “receiver” now controls the company’s assets and is tasked with examining Theia Group’s finances and selling off what it can to cover expenses.
What’s become of the company’s ambition is also unclear. Theia Group representatives have repeatedly declined interview requests with Business First since spring 2021.
But after city officials worked on the ambitious deal for roughly three years, court records show some of what Theia Group left in Albuquerque. The receiver found seven servers, two PCs, two tablets and a cell phone in New Mexico’s largest city after the company terminated one of its local office lease agreements and was locked out of its other two properties by its landlord for non-payment.
Three years in the making
Keller announced the Orion Center with the disclaimer that there was “still a long road to go.” But Theia Group had apparently started down the road to Albuquerque in 2018.
In December of that year, Theia Group director of operations Jason Gomez visited the Double Eagle II Airport, according to emails obtained by Business First through a public records request to the city.
Lisa Leyva, the aviation development manager for the city, said she and others met with the company’s “flight crew” and had “initial conversations about potential development” at the secondary airport on Albuquerque’s Westside.
“At that point, we didn’t know the magnitude of what the project was going to be,” Leyva told Business First in a May 2021 interview. “I knew they were looking at bringing in some aircraft, which is why they were inquiring about doing visits on an airport, and that was about it.”
It is unclear what type of operations Theia Group may have considered bringing to Double Eagle, though the company entered into a lease agreement in 2020 for a hangar at a North Carolina airport.
Leyva and Gomez discussed a potential follow-up meeting in February and March of 2019, according to the emails.
A few months after, Nyika Allen, Albuquerque’s then-director of aviation, signed a nondisclosure agreement, as did Synthia Jaramillo, who at the time was the city’s economic development director.
The agreements, which Theia Group’s general counsel Eugene Sullivan also signed, barred the parties from disclosing information received under the agreement “in civil actions, audits or other review venues with outside parties.”
At about that same time, conversations shifted to the Aviation Center of Excellence land where the Orion Center was ultimately proposed, Leyva said. The development — if it came to fruition — would have encompassed more than 4 million square feet near the intersection of Gibson Boulevard SE and Girard Boulevard SE.
James Reid Gorman, the local lead for the Orion Center, told Business First in a December 2020 statement that “the Orion Center will be one of the largest construction projects in the United States.”
A meeting in D.C.
By September 2019, Theia Group had caught the attention of other government officials.
“I have brought this substantial and exciting deal to the attention of the city administration and they are interested in meeting your board to discuss further,” Allen told Gorman, according to emails obtained via a public records request. “Is that possible? Perhaps we could meet with you all in DC?”
Theia Group’s company leadership included some very high-profile individuals. Among them were Stephen O’Neill, the former CEO of Boeing Satellite Systems, and Robert Cardillo, the former director of the National Geospatial-Intelligence Agency, according to interviews and court documents.
“There was a lot of energy in the office that I went into, a lot of energy in the boardroom.”
— Nyika Allen, former director of Albuquerque’s Aviation Department
Six months later, during the early days of the Covid-19 pandemic, Allen and city of Albuquerque chief operations officer Lawrence Rael traveled to the nation’s capital to “talk about how interested we were in having them locate in Albuquerque,” Rael told Business First on Dec. 7, 2020.
“There was a lot of energy in the office that I went into, a lot of energy in the boardroom,” Allen said in a Nov. 10, 2021, interview with Business First.
“When I had gone to Washington early on to talk to their company, it was an impressive board of directors, I will say, in the sense of their expertise and in the sectors of the business community that they represented in the government,” Albuquerque’s Rael said during a January interview with Business First.
Theia Group was cofounded by Erlend Olson and Joseph Fargnoli in 2015. Olson brought local ties to the project. His parents retired from Sandia National Labs, according to a 2010 Fortune article. And U.S. Securities and Exchange Commission documents show that Olson graduated from New Mexico State University and spent 15 years at NASA’s Jet Propulsion Laboratory.
Rael confirmed that both Olson and Gorman were in attendance at the D.C. meeting.
After the meeting in D.C., Theia Group’s expansion effort advanced. In April 2020, officials from the company and city signed a letter of intent for the lease and development of the Aviation Center of Excellence property.
Negotiations progress
In a June 2020 email obtained by Business First through a public records request, Gorman asked Mark Roper, division director at the New Mexico Economic Development Department, for a “refresher on the IRB topic.” IRB is a common shorthand for an industrial revenue bond, often used to support economic development projects. “We’re getting our construction budget estimates back and I’d like to make sure we’re factoring in that opportunity properly,” Gorman’s email stated.
Throughout the following summer and fall, lease negotiations progressed, according to a presentation titled “DISCUSSION MATERIALS FOR GROUND LEASE AT ACE,” which Business First obtained via a public records request. The presentation, which Gorman sent to Allen in December 2020, gives more insight into what type of operations might have been in store for the Orion Center. A rendering from the document depicts hangars plus optical assembly, “propulsion pressure test” and “acoustic vibe” areas.
Emails and a draft meeting agenda titled “IDO Agenda, 9/2/20, 5PM MST” shed even more light on the expansion effort.
Gorman sent the agenda to executives with Albuquerque-based Consensus Planning, and also engineering firm Bohannan Huston, which has offices in New Mexico and Colorado. The agenda was provided to them the day before a Sept. 2, 2020, meeting with the District 6 Coalition of Neighborhood Associations, which comprises 17 local neighborhood associations, where the project was detailed, according to the emails and a meeting report.
The IDO draft agenda also stated: “the company will participate in available discretionary and statutory incentive programs.” The agenda said the Orion Center campus will “phase to upwards of 5,000 local employees,” and that “this is a multi-billion-dollar investment in New Mexico.”
After the District 6 neighborhood meeting in 2020, city officials wanted to advance the project through the approval process — and share it publicly.
But when the Aviation Department moved to make a public announcement, Gorman wrote in an October 2020 email that “there can’t be a groundbreaking press event” until several steps were completed. Those steps included the city council’s approval of the lease and the approval from Albuquerque’s Environmental Planning Commission (EPC).
The EPC gave the green light to preliminary plans for the Orion Center on Nov. 12, 2020. Later that day, from the barren plot of land, Keller held a live-streamed news conference at the proposed site of the Orion Center.
“We probably would have preferred to, you know, just continue through the process and then have a nice big celebration when everything is done, but you know [Mayor Keller is] super excited about the prospects of it,” Gorman told Business First one week after the EPC decision.
Gorman also said: “We have to get the full approval of the project in order to unlock financing, which is lined up.”
Talking the talk
Details about Theia Group’s workforce and how it planned to raise the money required to get the Orion Center off the ground weren’t made readily available by the company.
Theia Group spokeswoman Susan Davis told Business First in December of 2020 that Theia Group “does not disclose investor information, confidential and proprietary business plans, nor private information on its partners. Later she said, “questions on employees and hiring are proprietary.”
State Economic Development Department Secretary Alicia J. Keyes said in a statement to Business First that Theia Group reached out to the state as early as May 2019.
“We were excited about the potential of this large expansion and actively engaged with them about potential state incentives, including [Local Economic Development Act] grant assistance and possible job training through [the Job Training Incentive Program],” Keyes said in the October 2021 statement.
Local Economic Development Act incentives are used to grow existing New Mexico businesses and recruit others to the state. Job Training Incentive Program money helps fund training for newly created jobs in expanding or relocating businesses for up to six months. However, in the case of LEDA incentives, a company usually is asked to first invest its own capital before receiving incentives, Keyes said.
“In order to protect taxpayers and public money, the EDD has repeatedly asked for documentation from Theia Group and its partners for the proof of funds necessary to carry out this sophisticated project,” Keyes said in the statement. “That documentation has not been forthcoming.”
Meanwhile, Small Business Administration data show Theia Group was approved for a $2.7 million Paycheck Protection Program loan in 2020, with 131 jobs reported. The data does not show if the company signed for the loan.
Then in March 2021, the company established a footprint at former Raytheon facilities in Albuquerque. It took over about 176,000 square feet of space between three properties: 10800 Gibson Blvd. SE (72,784 square feet), 1300 Eubank SE (83,156 square feet) and 10421 Development Road SE (20,737 square feet).
The next month, when city councilors met to consider the Orion Center lease, Gorman mentioned the lease at the former Raytheon facilities. He said the “number one focus right now is ramping up [the Raytheon] facilities because these facilities are going to be driving a lot of the talent that migrates to the Orion Center when it opens.”
With that, and a commitment to hire local subcontractors, city councilors unanimously approved the agreement.
After the thumbs-up from the city council, the lease neared its final signatures. But instead of coming to a close, the deal stalled. Behind the scenes, there was a problem.
A January 2020 lawsuit filed in the U.S. District Court for the Eastern District of Pennsylvania by Oregon-based Theia Technologies LLC started a court battle over allegations of trademark infringement. A February 2021 court order in the trademark suit prohibited Theia Group from using the THEIA mark in filings and communications with the U.S. government as long as the plaintiff — Theia Technologies — posted a $250,000 bond. Theia Group asked the court to allow the use of its name in dealings with the government, but the motion was denied, essentially stripping the company of its brand.
City councilors had approved the land lease for the Orion Center using the “Theia” name. Now, before finalizing the lease, the city needed to know which company name to use in the agreement and how to explain the “change in companies,” according to a July 2021 email from Peter Pierotti, the general counsel for the city’s Aviation Department.
The email, sent to Theia Group counsel and Rodey Law attorney Jenica Jacobi, added that “with the [Federal Aviation Administration’s] approval in hand, the city wants to proceed with signing the lease as soon as possible.”
Weeks went by with seemingly little movement on the agreement, although FAA approvals and proof of insurance did arrive. And then, in an Aug. 16, 2021, letter to Gorman, Albuquerque’s Rael gave Theia Group a choice: Commit to the Orion Center and, pending further review from the city, execute the lease and begin paying rent no later than the end of the month, or abandon the development.
“We kept giving them the opportunity because they kept coming back saying, ‘Look, we’ve got some issues that we’ve got to work through in the company and we’re working through them, etc.’”
— Lawrence Rael, city of Albuquerque chief operations officer
Around the same time, the city began hearing from other businesses that Theia Group had started to put its work agreements on hold, Rael told Business First in an interview this month.
“We kept giving them the opportunity because they kept coming back saying, ‘Look, we’ve got some issues that we’ve got to work through in the company and we’re working through them, etc.,’” Rael said.
The lease remained unsigned when Rael’s deadline came, but before it had passed, financial backers began to sue Theia Group claiming the startup owed them money.
Finances come into focus
One sign of investor unrest came when Thai billionaire Somphote Ahunai filed a lawsuit on Aug. 18, 2021, alleging Theia Group missed a $15 million repayment based on a $10 million investment from 2019 (In a September court filing, the company later disclosed Ahunai paid Theia Group $10 million).
The next day, FCS Advisors LLC filed a federal lawsuit. Part of New York City investment and finance firm Brevet Capital Management, FCS Advisors alleged that it was owed more than $289 million due on two $100 million promissory notes issued in June 2020 to refinance prior debt.
Reporting by Business First and documents later filed by Theia Group in the FCS Advisors lawsuit indicate the startup was not paying routine bills around the time of the city council vote in April 2021.
For example, as of May 2021, the company was behind on rent for the hangar it leased at the Statesville Regional Airport in North Carolina, airport manager John Ferguson told Business First. And as of June 2021, Theia began missing payroll for employees paid monthly, the startup disclosed in an October 2021 filing in response to the FCS court complaint.
Court documents reveal one of Theia Group’s funding strategies.
One of the startup’s approaches to getting capital for building and launching its satellite network involved “offering data analytics services to sovereign nation-states,” according to a declaration of co-founder Olson filed in October 2020 as part of the trademark suit by Theia Technologies. Theia Group would use aircraft to collect data for analytics services for nations in what it called its “Master Partner Program,” the declaration stated.
But the Covid-19 pandemic caused parties in the Master Partner Program to put agreements on hold, according to a September 2021 declaration of Gorman filed in conjunction with the FCS Advisors lawsuit.
Additionally, Theia executed an agreement with Barclays bank relating to the sale of at least $300 million in debt securities, though Brevet did not “engage with Theia and Barclays to help secure this financing,” Gorman’s declaration stated.
In Theia Group’s answer to FCS Advisors, it also alleged that Brevet adviser Robert Leeds undermined the startup’s ability to repay Brevet’s loans. Leeds was the “primary point of contact” for Theia and FCS Advisors, according to Gorman’s declaration.
Meanwhile, the company’s court battles mounted.
Aircraft maintenance firm Precision Air Inc. received a default judgment against Theia Group and KMR Aviation Services Inc. for $335,733 plus interest, according to an October 2021 court filing for a civil judgment in the U.S. District Court for the District of South Carolina. Also in October, the U.S. District and Bankruptcy Courts for the District of Columbia declared Theia Group to be in default as part of a lawsuit from New York-based not-for-profit SRC Inc., which alleged that Theia Group failed to pay more than $1.8 million due under two contracts.
Theia Group and the landlord at its Gibson Boulevard property in Albuquerque entered into a termination agreement at the end of October 2021, and the satellite company reportedly surrendered a $2 million security deposit to the landlord, according to a Dec. 22, 2021, report from the court-appointed receiver. That report also stated that Theia was locked out of its Eubank and Development Road properties for “non-payment of rents.”
“There is no company today. There’s no money being spent in any meaningful way … all there really is, is a license and a business plan,” Theia Group’s counsel stated during an Oct. 20, 2021, hearing, according to an Oct. 29 court opinion and order in the FCS suit.
U.S. District Judge P. Kevin Castel signed the opinion and order, allowing a receiver — a court-appointed official — to take control of Theia Group’s assets, which included the licensing from the Federal Communications Commission.
The FCC license allowed Theia to operate 112 Earth-imaging satellites and mandated that half be in the air no later than May 9, 2025. According to copies of loan agreements between Theia Group and Aithre Capital Partners LLC, the value of the frequencies Theia’s Earth-imaging satellites are approved to operate in are estimated to be worth in excess of $2.4 billion.
Castel appointed Michael Fuqua, managing director for B. Riley Advisory Services, as receiver on Nov. 8, 2021. The U.S. District Court judge called Fuqua’s appointment an “extraordinary remedy.”
Rael called Fuqua’s appointment the “icing on the cake, so to speak, or the nail in the coffin, however, you want to describe it.”
Ready for the next pitch
While the Theia deal ultimately fell through, Rael said he does not regret the pursuit.
What he would have regretted, though, is if they had missed the opportunity to be part of the conversation. That, he said, would have been the “worst,” especially if the ambitious company had landed elsewhere.
But after working with Theia Group for three years, the Aviation Center of Excellence land in Albuquerque remains vacant. This means the Keller administration will look for other opportunities to develop the land amid a competitive economic development landscape that becomes more sophisticated with every pitch meeting.
“[They] come in with these code names, you know, whether it’s Project Zebra … and you just really never know [all the details about the project],” Rael told Business First in the January interview when discussing how the economic development game is changing.
“Businesses that are expanding and growing are looking more and more for an opportunity,” he continued. “So, what kind of competition do we create [among], you know, communities?”
These days, that competition often means offering various economic incentives. In New Mexico, that can include money and credits for job training, capital improvements, expansion and growth.
"So, we did everything we possibly could to ensure that the city’s assets were protected and the taxpayers were protected.”
— Lawrence Rael, city of Albuquerque chief operations officer
Government officials indicated. Theia Group wanted to broach the topic of financial incentives, the city never got to that point with the satellite company. Rael said the city navigated the process with Theia Group judiciously and made it clear that until the land lease was in place and a financial commitment made, there “really isn’t much more to talk about.”
“We never got there with Theia because all it was was a land lease until what happened with their business in the courts began to sort of unravel,” he said in the interview this month.
“Certainly our due diligence was you’re not building anything on this facility until you sign the lease, until you deposit the funds and we have an agreement. ... Really, the next step is on the company to make that decision whether they’re going to build this facility or not,” Rael continued. “So, we did everything we possibly could to ensure that the city’s assets were protected and the taxpayers were protected.”
The Aviation Center of Excellence remains an attractive asset for the city, given its proximity to the Albuquerque International Sunport, Kirtland Airforce Base and Sandia National Labs. It could provide a home for a technology or aerospace company. It may also appeal to logistics firms, Rael said.
Only time will tell what kind of company might be interested in the land, but after a multiyear process with Theia, Rael and city officials are ready to find out. In fact, in some respects, they already have.
The lengthy negotiations with Theia Group raised Albuquerque’s profile and put the Aviation Center of Excellence land on the map for some companies that have a goal of expanding. Rael said the city has received inquiries from two or three companies about the potential use of the land.
“It did bring to light to other companies that potentially there was something here that they hadn’t seen before,” Rael told Business First.
“We did get a lot of folks that noticed that the property was available and there [are] some good opportunities, you know, with the airport. And it put us in a different sort of trajectory, if you will, with folks in different parts of the country.
— Chris Keller contributed to this article.
