I inherited a 3 acre lot a few years ago and am going to sell it. I really had no intention to sell it, but was approached with an offer I couldn’t refuse. It was initially 3 small lots  and I had it surveyed and the lots combined into one. I also had a dilapidated  building demolished on the property.
Am I wrong in thinking I can knock these improvements off my capital gain? I know I could reinvest in property  and not take a hit, but I’m looking to invest the funds and use dividends as an income stream.

I'd certainly figure all of those expenses into my cost basis.

Depends.  Talk to a CPA to see what your cost basis is.  Could be well worth it.

Along with any taxes/insurance which were not previously deducted.