I just learned that the Developer has listed his 67 acre project for $8.5 mil
Think about this for a little while. If he listed it for $8.5M, he probably believes it is worth a little bit under that. Depending on how many lots he could potentially subdivide into, that is ~$60-120k per lot.
Now I live across the bay from you, but I believe that buildable lots are worth a quite a bit more than that. Check with a realtor (maybe a brother) but find out the true value of a buildable 1/2 to 1 acre lot. At best, an easement you sell would be worth the difference between the current value and the total value after subdivision. Just to pick a number out of the air, say 120 lots were worth $200k each, that would put the total value of the project at $24M, making your easment worth $15.5M. You probably won't get anywhere near that, but somewhere in the $4 to $5 M range might be possible.
Plus, there is the value of your mom's 5 acre parcel. If the road were to go down the middle of it, and if it were subdivided at the same time as the rest, you could get 4 to 8 additional lots on it.
Any way you slice it, there could be an awful lot of money involved here. I would think long and hard about striking the best deal I could now, before someone else gets a chance to pull a fast one on your mom. Plus, if there ever does get to be an emminent domain fight, your negotiations now could help to place a higher value on the 5 acres.
Developers are frequently short of up-front cash, and I would consider some kind of a barter arrangement. Sell him the 5 acres for an initial cash payment on the order of $1M, plus you get all the lots he puts on the 5 acres, and enough more to total up to maybe 20% of all the lots in the project, whatever that number comes out to be.
This way you get to control whether any of the property closest to your mom is immediately developed, you get to scatter the rest of the lots throughout the development, so he can't concentrate your holdings in the less desireable areas, and you have enough lots to be distributed among the family so that if some want immediate cash and some want investments you can accomodate all, with no hard feelings.
You need:
1. A lawyer to deal with the developer and make certain all agreements are ironclad, and
2. A tax accountant to help you structure a deal (maybe a 1031 exchange) so that you don't get hit with a huge tax bill which consumes all of the up-fron money.
Don't worry about him not telling you he listed it, and don't list your mom's property yet, talk to a lawyer first. He has no obligation to tell you anything, and he will probably conceal a lot at any "family meeting". Don't let your emotions get in the way.
I would hire a lawyer right away and have him at the family meeting. This has a number of effects, all of which are good for you. It lets the developer know that you are not going to be pushovers, and it gets a witness to all the developer says and does. (All lawyers are "officers of the court" and their testamony is given a lot higher weight than that of us ordinary folk. If it comes down to a "he said, she said" arguement, this will be very helpful to you.) You may also be able to tell him to deal with your lawyer exclusively and not to communicate with any individual family member in the future. This will cut down on the divide and create dissent tactics he may have up his sleeve.
