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Lack of subcontractor license halts Pinnacle Towers work

Work on the drywall portion of the 965-unit, $150 million Pinnacle Towers high-rise apartment at 1443 Island Ave. has been halted because a drywall subcontractor is not licensed in California.

The California Department of Industrial Relations (DIR), the Contractor State License Board (CSLB) and the San Diego District Attorney's office found that Kelowna, British Columbia-based Clayton Wall & Ceiling Systems Inc. failed to obtain the license before starting work on the $6.34 million job this year.

The San Diego offices of Vancouver, British Columbia-based Pinnacle International Development, which acts as developer and general contractor, contracted with Clayton in August.

While the subcontractor applied for a California contracting license in December, it reportedly had not been issued when work began in January. An unannounced inspection of the site on March 28 led to the shutdown of the construction on the drywall portions of the 45-story tower.

CSLB issued an administrative citation to Clayton and a civil penalty of $15,000.

DIR’s Division of Labor Standards Enforcement (DLSE), also known as the Labor Commissioner’s Office, also cited Clayton for performing services without a valid state contractor license; its civil fine is $64,000.

“When it comes to contracting without a license, the law is very clear,” CSLB Registrar Steve Sands said. “You cannot enter a contract to work or actually do any work until you’re licensed. There’s no gray area here.”

Clayton’s license application is on hold until the fines are paid or an appeal is heard, delaying the San Diego project and any other project in the state. Pinnacle may also face administrative action for contracting with a non-licensee.

“Scofflaws should know that state agencies are sharing information and finding violations that might have previously been overlooked,” state Labor Commissioner Julie A. Su said.

“In challenging economic times, it’s important to protect honest businesses from being put at a competitive disadvantage, and workers from being given less than their earned wage.”

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