Neighbor wants to buy a part of my land for development deal

[James Porter]

Hi;  

I have been approached by a realtor representing my neighbor who wants to buy 8500sf of my property.  She has 19 acres behind her current residential lot that she is looking to develop.  The 19 acres cannot be full developed due to wetlands but she has a plan for a maximum of 5 lots and a road. 

The issue that she has is that her current residential lot is L-shaped and when she puts in the planed road she does not have the 150' diameter circle requirement to keep her existing dwelling.  Their options are:

1. Buy the 8500sf of land from me

2. Tear down their house 

3. Loose one of the new building development lots.  

Note...She cannot go to the other side to the other neighbor because there are wetlands on that boarder and the neighbor does not have enough road frontage to go far enough over to accommodate the wetland and a road... if they are even willing to go that far.

Anyway, it appears that I have a significant advantage in the situation.  If their current lot and house are worth $475,000 and she needs my land to keep her house... note that she is older and wants to stay in the house... what is my land worth?

The normal square foot price in my area is $3.50 - $4.00 as a buildable lot.  However, if she wants to keep her house and her lot I would think my land it work significantly more.  I have been given some advice that it might be worth up to 25% of the $475,000.  I am curious to know others thoughts, advice and or other ideas.  I know I have kicked the idea around of having her tear down the house and then offering to buy the "unbuildable lot" and then adding my 8500sf and then resell as a now buildable lot... the wife hates that idea lol!

Anyway would love to hear some thoughts... thanks