According to the Orange County Register article, Raffi "decided to hold the auction to make room at the park."
As part of the plan for the never-built 2012 Intamin coaster at the park, the old preserving kitchen and canning buildings back stage were to be removed. It's possible that there are once again plans to expand the park into this area, although I wouldn't expect to see a massive coaster project due to the current focus of the park, aesthetics, and neighbor concerns. A smaller scale coaster, a dark rides, or perhaps even a new themed area would be possible however.
Any project of this scope, if it is indeed in the works, would take quite awhile to complete, given the complexities of relocating utilities and moving various backstage offices, etc., so 2018 would be the earliest anything would be completed, although 2020 (Knott's 100th birthday) would probably be more realistic.