DURHAM — Capstone Development Corp. and Cottage Builders have reached a settlement with eight workers who say they are owed tens of thousands of dollars for months of work on the Cottages of Durham project.

A candlelight vigil planned by the American Friends Service Committee and other faith organizations turned into a celebration as the settlement was announced on Wednesday evening, Maggie Fogarty economic justice project coordinator with the committee, said.

Fogarty said the workers, who are still in the area, expect to be paid today.

The issue of the alleged unpaid workers was first made public by the committee last week during a rally and protest that ended at the Cottage Builders realty office in downtown Durham during which about 70 protesters demanded the workers be paid immediately and detailed the labor laws they feel Capstone violated.

Cottage Builders is a subsidiary of Capstone Development Corp., the Alabama-based developer of the $30 million Cottages of Durham project.

Cottages of Durham is being billed as resort student living on Technology Drive and will be comprised of 141 units that can house 619 students. Cottage Builders president John Vawter said construction is scheduled for completion by July 31.

Vawter said a majority of the workers on the massive project are New Hampshire-based, but the crew in question worked for Builders Construction Services, LLC, an Alabama-based subcontractor on the project. They are also immigrants, although the immigration status of all eight workers is unknown.

New Hampshire Department of Labor Commissioner George Copadis said there is an active investigation against several contractors associated with the Cottages of Durham project but would not provide further detail on Wednesday.

“That is really all I want to say,” Copadis said.

Federal investigators are also looking into the issue.

Dover Police Capt. Bill Breault said three Guatemalan nationals came to the department on Jan. 18 to report that they had not been paid for several weeks and requested assistance.

Breault said the three men could not produce legitimate identification or prove their immigration status, and in fact made statements admitting that they were in the country illegally, so Immigrations and Customs Enforcement was called.

“Anytime we deal with people who we have a reason to believe their immigration status is in question, we contact ICE,“ Breault said. “Sometimes they act on the information, sometimes they don't.”

In this case, ICE came down the same day and took over the investigation, he said.

“We were fine with that because we had reason to believe it may have involved additional illegal immigrants working for the same company,” Breault said.

Vawter said he could not speak to whether BCS would remain on site or not. He said the eight-man crew has been replaced with New Hampshire based workers.

“We want this project to truly be an asset to the community and … I think the town of Durham is fully committed to making sure our project is a success,” Vawter said. “We want to be a great member of the community and that is where we stand right now.”

Vawter said the basic points of the settlement had been agreed to by Wednesday evening and he expected to release more information today or tomorrow.

He said the amount of the settlement would not be disclosed.