Edgartown is one step closer to having a new steward for the Yellow House after one of two potential developers withdrew from the process Monday.

A special town committee charged with evaluating the proposals is slated to meet again next Monday to formally vote on the proposal from Mark Nicotera of Trademark Services construction, financial backer Stephen Berger and architect Dudley Cannada to turn the property at 66 Main street into three affordable housing units and retail space. The group is negotiating with the Island Housing Trust as a possible partner in the venture.

Architect Patrick Ahearn withdrew his plan after the town procurement officer said it would be declared ineligible as outside the scope of the RFP. — Mark Alan Lovewell

The committee’s recommendation will go to the selectmen, who will make the ultimate decision about who will take on the project to renovate and convert the vacant property to active use. The town took the property by eminent domain for $3 million last year. A request for proposals went out in November.

Two proposals were in the running, but at a meeting Monday real estate developers Michael and Rebecca Hegarty and architect Patrick Ahearn asked to have their proposal withdrawn after the town procurement officer and town counsel said they thought the plan was not responsive to the RFP, which is subject to strict public bidding laws.

The two and a half-hour meeting was marked by procedural back and forth and discussion that was prickly at times.

The Hegarty-Ahearn proposal called for seven housing units, three retail spaces, 17 parking spaces, and a 24-foot by 24-foot addition on the building.

Mr. Nicotera and Mr. Cannada’s proposal calls for three housing units, two retail spaces, five parking spaces and a 545-square-foot wrap around addition. Mr. Cannada has also suggested an open-space plaza between the Yellow House and town hall.

The Hegarty-Ahearn proposal was reviewed by the committee at a meeting last week, with the Nicotera-Cannada plan due for review Monday.

Mark Nicotera of Trademark Services construction and financial backer Stephen Berger. — Mark Alan Lovewell

But at the Monday meeting, town procurement officer Juliet Mulinare said further analysis of the Hegarty-Ahearn plan showed the proposal was missing two required forms, although that could be waived by the town. More seriously, she said, the proposal included leasing the open space part of the property, which was specifically excluded in the RFP.

She said the proposal also violated standards set by the Community Preservation Act. (About $1.5 million in funding for the town purchase of the property came from CPC funds designated for historic preservation.)

Ms. Mulinare said proposed additions and alterations to the building violated standards for historic rehabilitation. The proposal should be declared ineligible, she said.

Town counsel Karen Burke agreed but suggested that the committee continue to evaluate both proposals for the record.

Committee members and Mr. Ahearn and Mr. Hegarty went back and forth about the issue and how to proceed.

Then Mr. Ahearn interjected to say he and the Hegartys would be happy to withdraw their proposal, prompting groans from some in the audience and a few members of the committee.

“I think we’re just going to withdraw the proposal and hopefully you accept Dudley’s proposal,” Mr. Ahearn said. “It’s well done, and [I’m] very much happy to see that.” He continued:

Former property owner Benjamin Hall (left). The town took the Yellow House by eminent domain last spring for $3 million. — Mark Alan Lovewell

“At the end of the day I can’t believe that if the town administrator and procurement officer are saying that the application is unresponsive that anybody’s going to vote over that. I think the writing’s on the wall. I support Dudley’s scheme.”

Some committee members said they were upset to learn the new information during the meeting.

“It’s the first time I’ve heard about all these things,” Gail Croteau said.

Carol Fligor concurred. “It’s a shock to me to hear this,” she said. “Both groups have put in a tremendous amount of effort, Patrick’s involvement goes back years without charge to anybody. I think he deserves another chance to redo what he should have done.”

Committee chairman Chris Scott said the town would have to reissue the RFP in that case and go back to the beginning.

“We all appreciate the time and effort that went into the proposals. It’s a difficult position for us to be in,” committee member Sam Sherman said. “However, if the applicant is withdrawing, I think it takes the decision out of our hands.”

The committee voted 5-2 to accept the withdrawal. Mrs. Fligor and Ms. Croteau voted no.

The committee began the process of evaluating the Trademark Services proposal before adjourning. The meeting will continue next Monday at noon in the town hall.