At $1 billion, the most expensive piece of land ever to be marketed in Los Angeles offers a luxury development opportunity that will need not only deep pockets, but some serious mathematical acrobatics to make it worthwhile, local experts say.

There are conceivable ways a residential developer could buy “The Mountain,” a 157-acre summit in the iconic 90210 ZIP Code in Los Angeles county, and build it up into a community of mega-mansions only billionaires could afford, say several developers and local real estate experts. But the current zoning and city records documenting past efforts to build on the land reveal just how hard it will be to get the math right.

To get to the property, which hit the market last week, one drives along Tower Grove Drive, until the rows of contemporary, cream-colored homes in the $4 million to $6 million range end at a gate. Behind the entrance a private road continues, flanked by sloping canyons and panoramic views on either side, to a tree-lined cul-de-sac around which one can easily imagine a secluded community of outrageous mansions.

The parcel comprises 17 lots, but only six of them are zoned for residential building. In total, buildable area amounts to about 26 acres, or 16% of the whole 157-acre lot, according to property records.

Even in the most optimistic and hypothetical situation, the development would result in a community of homes that would have to sell at prices the city has yet to record in order to provide a decent return on investment, said Paul Habibi, a real estate entrepreneur and professor at the University of California, Los Angeles.

“One could potentially do a zone change, there are various ways to change the planning ordinances,” Mr. Habibi said, adding that with 17 lots, a developer would still need to fill them with the largest possible homes that he could sell in order to make back the land cost.

In this (very hypothetical) case, one could conceivably build 17 homes measuring 50,000 square feet with top-of-the-line amenities, fixtures and finishes that would run around $1,000 per square foot to build, Mr. Habibi said.

That’s a total cost to the developer of $50 million to build each home by his estimate—or $1.85 billion all in with land and construction. That means mansions selling for well north of $100 million by his back-of-the-envelope calculations.

“A developer wants a healthy margin on this,” Mr. Habibi said. “Do you have the buyer pool to satisfy 17 times north of $100 million?

"On the one hand you have a very exclusive community of $100 million homes, but on the other, you have 17 of them,” he added.

Today, the record for the most expensive home sold in the city stands at $110 million, set in April.

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The Court of Public Opinion

Past owners of the property have gone back and forth on whether to develop a community of mansions to build a single, unparalleled estate.

In the early ‘90s, the owner of the land, TV producer and host Merv Griffin, went to the city with plans to build six single-family homes on the property and was granted permission as long as the steep, wild hillside surrounding the development comprise public walking trails, according to documents from the city planning commission.

The mansions were never built and Griffin sold the land to Mark Hughes, the late founder of Herbalife, who promptly submitted documents in 1998 for permission to build a lavish classical-style mansion spanning 45,000 square feet and with a cupola soaring 65 feet in the air.

At a public hearing on the project in September 1998, dozens of area residents showed up to gripe about the project. They complained that the megamansion was excessive and that it would violate hillside ordinances, “which seeks to prevent ‘mansionization’,” according to records of the meeting.

If anything, those city records highlight another formidable barrier the next owner will face: the public opinion of Los Angeles homeowners, who are perhaps even more sensitive to ‘mansionization" then they were 20 years ago.

Hughes died in 2000, before he could build his home, and the property changed hands again, this time selling to its current owner, a company linked to Victor Franco Noval, son of philanthropist Victorino Noval, for $23.75 million.

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Given the financial and bureaucratic hoops a developer would have to jump through, it’s not surprising the star real estate agent hired to market the land, Aaron Kirman of Pacific Union International, believes The Mountain will most likely sell to (a very rich) individual interested in building a private home.

“The Mountain of Beverly Hills looks directly down at Beverly Park, which until now, was known as the most exclusive location in Beverly Hills,” Mr. Kirman told Mansion Global in an email.

“The property will be home to what can potentially be the most unique, limitless development opportunity in the world. The buyer is also capable of building up to 48 feet, 12 feet higher than the current allowable height,” he added. “We’ll never see an opportunity like this again. Unmatched views, privacy, and flat acreage.”

Billy Rose, a broker-turned-developer with The Agency, has been on the property before and can envision scenarios where six like-minded billionaires or one large family of billionaires, say from the Gulf, go in on the land.

“We’re talking about the premier luxury gated compound,” Mr. Rose said.

“It goes back to the days of ancient Rome and ancient Greece, where they had their mountain and they built their citadel. It makes sense for someone who doesn’t care about the economics.”

A $100-Million Market

The Los Angeles market has been full of surprises over the past several years, beginning with the sale of Hugh Hefner’s Playboy Mansion in 2016 for $100 million, the city’s first nine-digit sale. In April, Hard Rock Cafe founder Peter Morton set an all-time record when he sold his Malibu architectural beach house for $110 million.

There’s an all-out arms race among the city’s spec home developers to double that record. Bruce Makowsky first put his Bel Air development with a helipad and wall of candy dispensers on the market for $250 million.

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Shawn Elliott, a broker with Nest Seekers International who is listing Mr. Makowsky’s project, which now listed at $188 million, said he once met with the owners of The Mountain six or seven years ago.

“One of the owners walked into my New York City office. He told me he owned this property up in Beverly Hills and at the time he was talking $300 million to $400 million,” Mr. Elliott said.

Property values have appreciated significantly since then, he said, arguing that The Mountain is one of the best lots in the city.

You can get a great view of the lot yourself from the rooftop at the Waldorf Astoria hotel in Beverly Hills, Mr. Elliott said.

“You see this mountain and it’s flat and it’s clean and it’s impressive. It’s twice the size of Disneyland,” he said. “It’s the best of the best, but I don’t think it’s going to trade for $1 billion.”