Standard Pacific CEO Bowing Out

Arthur E. Svendsen, who founded Standard Pacific Corp. 33 years ago, will step down at the end of the month as chief executive of the firm he turned into one of Southern California’s largest home builders, the company said Thursday.

Svendsen, 76, will remain as the Costa Mesa company’s chairman. He relinquishes the day-to-day duties to Stephen Scarborough, 51, who was promoted three years ago to president.

Svendsen, who was not available for comment, guided the company through a number of significant changes in the cyclical real estate industry: through recessions of the early 1970s and 1990s, the high interest rates and real estate bust of the early 1980s and, with its one-time Standard Pacific Savings & Loan subsidiary, the financial debacle in the thrift industry.

The company also was the second home builder to change its structure to a limited partnership, in 1986, as a way to avoid paying taxes twice, once on profits and again on dividends. But it changed back to a corporate structure in 1992 to make it easier to raise funds.

Scarborough, 51, will retain his position as president when he steps into the chief executive’s role Jan. 1. He will gain overall responsibility for the company’s home building divisions in California, Texas and Arizona.

Scarborough, who joined the company in 1981, said a succession plan was launched over the past two years that prepared him for the eventual change. While Scarborough said he hopes to expand into more markets, he said no significant changes are planned.

“We believe strongly in the way the company has been organized and run,” Scarborough said. “The results speak for themselves.”

Standard Pacific has improved significantly over the past two years with Scarborough at the helm. Sales may top $1 billion this year, growing more than 70% from 1997. Analysts also project that net income could rise to $65 million, up from $27 million two years ago.

Scarborough said the company will deliver up to 675 homes in the Southland this year, a level that has not been reached since the last housing boom a decade ago.

Companywide, Standard Pacific expects to complete 3,400 homes this year, increasing 75% from two years ago.

“Steve is doing a good job of running the show, and he’s being recognized for it,” said Craig Silvers, an analyst at Sutro & Co. in Los Angeles. “It’s a seamless transition. If Wall Street thought much of it, the stock would have moved significantly.”

Standard Pacific’s stock, traded on the New York Stock Exchange, fell 13 cents Thursday, closing at $11 per share.