I’m no mindreader but I’ll bet the original plan was to scrape the house, use that parcel to provide the access to the rear site; get the site rezoned for mutiple parcels, build some townhomes or detached SFRs on a condo map and sell them off at a profit.
On paper it might have looked good, but by the time an architect has to start dealing with infrastructure and topography the complication factor blows up exponentially. There’s almost certainly some hillside and drainage overlays .
