By Arturo Castañares
Editor-at-Large
A local drywall installation company that systematically underpaid its workers on two local affordable housing projects has agreed to settle a civil lawsuit filed by the US Department of Labor by paying $790,000 in back wages and fines.
Escondido-based Innovative Wall Systems, Inc., doing business as Alta Drywall, was sued in San Diego federal court for underpaying 580 employees who worked more than 40 hours a week, including weekends, without receiving the required overtime rate or minimum wage as mandated by federal law.
Federal lawsuit consent judgment and order against Alta Drywall
The Department of Labor and Alta Drywall entered into a Consent Judgment and Order on September 12, 2025, over 580 employees who were not paid overtime on two affordable housing projects; the 200-unit Columba project in Chula Vista’s Millenia development, and the 309-unit Mt. Etna St. complex in San Diego.
Both projects were developed by Carlsbad-based Chelsea Investment Corporation, one of the largest affordable housing developers in the country.
The judgment ordered Alta to pay $385,000 in back overtime and minimum wage to 580 employees, plus an additional $385,000 in liquidated damages to the employees, and a $20,000 civil penalty to the Department of Labor.
Court order for $790,000 in payments and fines for Alta Drywall.
Alta Drywall was a subcontractor to Emmerson Construction, a wholly owned subsidiary of Chelsea.
Chelsea was named this year’s Affordable Builder of the Year by the Building Industry Association of San Diego during its annual ICON Awards event, while Emmerson Construction was awarded the General Contractor of the Year.
The Department of Labor’s judgment included the names of the 580 underpaid employees. A review of the list shows that nearly all are Hispanic surnames, with the most common last names in the list including Garcia, Hernandez, Lopez, and Martinez.
Latinos make up the majority of framing and drywall workers in California, so they are disproportionately affected by wage theft and workplace protection violations.
La Prensa San Diego reviewed videos recorded during the construction of the Columba project in Chula Vista, where two workers admitted they were not being paid according to state and federal labor laws.
One worker said he was paid $400 per week regardless of the hours he worked, and that most of his days were 10 hours or more of work, and six days per week.
The other worker said he was paid by the square foot of drywall he installed, but the rate was constant regardless of how many hours he worked.
Both of the workers were included in the Department of Labor judgment.
Jason Shane Bellamy, CEO of Alta Drywall, did not want to comment for this story.
Alta Drywall lists other major builders among its client list, including Brookfield Residential, Lennar Homes, Pacific Coast Communities, Pardee Homes, and Shea Homes.
La Prensa San Diego asked Chelsea Investment for comment on Alta Drywall’s wage violations and whether Chelsea would continue to use the company as a subcontractor.
Chelsea Investments responded with a generic response without referring to Alta Drywall.
“Chelsea Investment Corporation works with hundreds of subcontractors, both large and small. All subcontractors must be licensed, bonded, insured, and in good standing. We have high standards for all subcontractors, and if they are found to not meet our standards, they are not qualified to work with us,” the statement reads.
Chelsea Investments is the housing developer selected by the City of San Diego to participate in the Midway Rising development, which is proposed to build a mixed-use complex at the site of the current Sports Arena.
POLITICAL CONTRIBUTIONS
Chelsea Investments and employees of the company have been major donors to local political campaigns in recent years, with 27 contributions given to San Diego City officials and campaigns since January 2020.
In March 2023, Chelsea Investment donated $20,000 to “New San Diego”, a political action committee led by local attorney Gil Cabrera and formed to support causes championed by Todd Gloria after he was first elected in 2020. New San Diego raised over $624,000 between 2021 and 2024.
Chelsea also donated $25,000 to the 2022 Measure C campaign, which fought to raise the state’s coastal zone 30-foot building height limit within the Midway area so that the Midway Rising development project could be built. Chelsea is a partner with the project developer, Brad Termini.
The politician that received the most individual contributions from Chelsea during the same period has been San Diego Mayor Todd Gloria, who received five contributions from different principals and employees of Chelsea just two months after he was first elected in November 2020.
This year, Chelsea donated $2,000 to a political action committee named Protect Neighborhood Services sponsored by the San Diego Municipal Employees Association union to support San Diego Councilwoman Vivian Moreno in her run for the San Diego County Board of Supervisors in April.
Moreno was the Chair of the San Diego City Council’s Land Use and Housing Committee that selected Chelsea’s group for the Midway Rising Project to redevelop the Sports Arena in 2022.
The project is proposed to include 4,254 housing units, including 2,000 affordable units, 8.12 acres of public parks, 6.42 acres of public space, a 16,000-seat sports arena, and 130,000 square feet of commercial space.
Before the committee meeting, La Prensa San Diego exposed that City Real Estate Assets Department staff were not allowed to completely vet the three remaining bidders because Mayor Todd Gloria’s office had already decided internally to select the Midway Rising team.
The team is headed by Brad Termini and his Zypher Development company. Termini and his wife donated $100,000 to a political action committee created to support Todd Gloria’s 2020 campaign for Mayor.
The combined contributions by Termini and his wife were by far the largest personal donations to that campaign committee, with the next largest contribution being only $15,000.
Termini also donated a total of $650,000 to fund the Measure C campaign committee to exclude the Midway district from the state’s 30-foot height limit. That was the same committee where Chelsea donated $25,000. The Midway Rising project could not be built without changing the 30-foot height limit law.
Just last week, the San Diego Planning Commission voted 7-0 to recommend approval of the Midway Rising project to the full San Diego City Council.
