A proposal to rescind $400,000 in Community Preservation Act money for the hotly debated Bradley Square project was easily defeated by Oak Bluffs voters during a well-attended special town meeting last night.

The funding was approved by voters at the annual town meeting in April and has already been set aside to pay for a portion of the affordable housing component of the Bradley Square project.

The project includes historical preservation of the Island’s first African-American church, artist work space and a community center at the corner of Dukes County and Masonic avenues. It was approved by the Martha’s Vineyard Commission in June as a development of regional impact (DRI); a revised version of the plan is now back in front of the commission for review.

But amid growing opposition to the project from some neighbors concerned about size, a petition was circulated calling for the community preservation funding to be rescinded.

The stage was set for fireworks last night as voters piled into the Oak Bluffs School cafeteria. A total of 174 voters, a high number for a special town meeting, were gathered when moderator David E. Richardson called the meeting to order.

“This looks like the type of audience you would see for an annual town meeting,” Mr. Richardson said.

But the debate was not heated. Don Lambert, chairman of a neighborhood group that had opposed the project but recently announced its support for the revised plan, took the floor and urged voters to put the CPA funding on hold for now.

“Since the vote took place last April to approve this money, this process has become very complicated. The [Oak Bluffs Concerned Citizens] was formed after the Martha’s Vineyard Commission shockingly approved the project and disregarded concerns from the neighbors and obvious design flaws,” Mr. Lambert said.

Mr. Lambert echoed concerns recently raised by selectman Kerry Scott about the process by which Bradley Square was approved as a so-called friendly 40B (Chapter 40B is the state affordable housing law).

In February selectmen unanimously voted to sponsor the project as a friendly 40B under the Local Initiative Program. Ms. Scott has suggested that selectmen failed to hold a public hearing to review the plan as required.

Mr. Lambert picked up the theme last night.

“Under a [local initiative program] project, the board of selectmen have a duty to hold hearings as the sponsor . . . they must analyze funding, open space, impact on the neighborhood,” he said. “I say we rescind this money temporarily until we can all come together,” he said.

Philippe Jordi, executive director of the Island Housing Trust, gave a detailed presentation explaining how the project has changed over the past 18 months through negotiations with neighbors and the concerned citizens group. He said there were no problems with the process, citing an itemized list of public meetings held on the project. “We have worked very hard over the past 18 months to maintain a transparent and fair planning process,” Mr. Jordi said.

Finance committee member Peter Palches agreed.

“It is inconceivable that anyone at this point can say with a straight face this has not been adequately aired,” he said.

Nashawena Park resident Ron Mechur said neighbors are not opposed to affordable housing or historical preservation, but simply to the size and scale of the Bradley Square project.

“There are a lot of good things about this . . . the problems most people have is the size of the project,” he said.

Catherine Deese moved for an Australian ballot, but after Mr. Richardson a called for an informal voice vote on the motion, it was apparent most people preferred a public vote. In the end the article to rescind the CPA money was defeated by a large majority.

In other business last night, an article asking to allow restaurants who do not hold a liquor licenses to serve takeout food until 1:30 a.m. was narrowly defeated.

Stewart Robinson, the owner of Smoke’N More Bones on lower Circuit avenue, urged voters to support the measure so people leaving bars could buy a cup of coffee or something to eat before heading home.

But police chief Erik Blake argued against the article. He said a change last summer to the town bylaws allowing bars to stay open until 1:30 a.m. proved effective at preventing large crowds from gathering at the end of the night.

He said bars now no longer allow reentry after 12:30 a.m., which discourages people from hanging out on the street.

“What’s going to happen is people are going to start sticking around. The number one question officers hear is ‘where can I get something to eat.’ Now people will have a place to go,” the chief said.

The article was defeated 70 to 73.

Voters easily approved an article to move $75,000 from free cash to a new stabilization account for funding post-retirement benefits for town employees. Several years ago the Government Standards Board approved a new accounting standard forcing all government agencies to account for post-retirement medial coverage for all employees.

They also approved a series of articles to establish a new stabilization fund and start setting aside money for the future purchase of 11 acres in Edgartown adjacent to the regional refuse district transfer station on the Edgartown-West Tisbury Road.

And they unanimously agreed to spend $250,000 from the wastewater retained earnings account for investigative work at Ocean Park to determine the source of treated effluent that has seeped to the surface in recent months.

In September the state Department of Environmental Protection issued the town of a notice of noncompliance after finding effluent on the surface of the public park.

Wastewater superintendent Joe Alosso told voters that about $30,000 would go toward researching the effluent problem to determine the source. He said the balance of the money would be used to either repair the problem at Ocean Park or begin the engineering and development of an alternative site on town property abutting the wastewater treatment plant.

Asked to provide a more detailed description of how the money would be spent. Mr. Alosso said at this point it was hard to tell.

“It’s not like fixing a car where you can look and see that you need a new alternator. These problems are underground . . . it’s hard to know what’s down there,” he said.