Birtcher Buys Land in Seattle Area From Railroad : Development: The builder paid cash for 230 acres and is negotiating with Union Pacific for another 500 acres.

Birtcher, a big developer based here, said Monday that it is expanding its business in the Seattle area with the $16.5-million purchase of about 230 acres and several buildings from a Union Pacific Railroad subsidiary.

Birtcher said it will construct about $200 million worth of factories and warehouses for sale and lease on the land, which is in the cities of Kent and Sumner, south of Seattle.

The developer said it is negotiating with Union Pacific for another 500 acres in the Seattle area, which would bring its investment to about $50 million.

Birtcher said the deal would be the company’s biggest since Japan’s Mitsui & Co. Ltd. bought half of Birtcher’s development and construction business in June, 1990.

With the backing of the world’s largest trading company, Birtcher says it paid cash for the land, something that is rare in the highly leveraged real estate business.

But real estate loans have been more difficult to come by because of the savings and loan crisis and tighter federal scrutiny of commercial banks.

“Bank financing for a straight land acquisition in particular is very hard to do these days,” said Michael H. Voss, president of Birtcher. “We didn’t even try very hard to get a loan, although we had some offers.”

The Seattle land is just a few hundred acres of the thousands that Union Pacific Corp.--the railroad’s parent company--holds on the West Coast and in the Midwest.

Newport Beach-based Koll Co., another giant Orange County developer, began negotiating to buy most of the railroad’s land in 1989 for $532 million. The railroad wanted out of the development business in order to raise the price of its stock. But the deal with Koll fell through last year when Union Pacific said it wasn’t satisfied with Koll’s financing package. It would have been Koll’s largest real estate deal.

Meanwhile, Birtcher also said Monday that it is no longer contemplating buying a home-building company. Birtcher’s predecessor company began as a small, family-owned home builder after World War II and diversified into commercial construction in a big way during the 1970s. The company said last year that it wanted to re-enter the residential construction business by acquiring a home builder.

Now, however, Voss said the company plans to hire an executive to build a home-building subsidiary for the company from scratch. With land prices at rock bottom, he said, it seemed easier and cheaper for the company to start its own unit. The company is negotiating with an executive to head the home-building business, Voss said.

And finally, Birtcher also said Monday that it is considering manufacturing prefabricated homes in the United States for sale to Japanese landowners.

The impetus for the idea came from a three-story, wood apartment complex that Birtcher and a Mitsui housing unit are building in Japan as a demonstration project for the Japanese and American governments.

Birtcher and Mitsui hope the structure--built with American materials and labor--will interest Japanese developers and contractors in American-made housing.

The apartment building is scheduled to be completed by the end of the year.

“We think this could turn into a very profitable business,” Voss said.