Help with land option valuation, anyone with experience?
Does anyone have any real world experience on pricing the value of a land option? Trying to understand what is a fair price for a land option. 

There is a situation where about 100 acres of land is available from the government and the land option allows the buyer to exercise the option at $5 per square foot, the market price is $35 and the option expires in 2 years. To maintain the option, horizontal improvements must be made and they total roughly $50 million. The current holder of the option is not doing anything and it seems they are incapable of moving forward, they put a bunch of money down to do some horizontal improvements and remove buildings to make it flat.  I would like to purchase this option from this holder, how does one price such an option? 

The counter party to the land option is the government, they wish to see this land developed to generate economic activity.  The carrying costs are potential income from property taxes and business taxes.
[{"id": "iltvz58", "text": "Uh kinda. I did something similar but with lease rights. Turns out they weren\u2019t legally transferable but because of some regulatory thing, not anything in the actual lease agreement. So might want to re-confirm the options rights transfer with deed. \n\nIn my case, the governmental authority decided they were just going to let the in-place agreement run out until expiration and that my client could come see them then.", "replies": [{"id": "ily23ji", "text": "I buy and sell options daily \ud83d\ude05", "replies": [], "depth": 2}], "depth": 1}, {"id": "ilx23i2", "text": "Work backwards. Figure out your revenue potential. Put in your development/cost estimates. Financing costs if any. Contingency. Solve for land for whatever return metric you are looking for IRR, GM, NM, etc\u2026", "replies": [], "depth": 1}]