In a surprise vote late last night, the Martha's Vineyard Commission narrowly failed to approve plans by Island Elderly Housing for a five-unit apartment building for low-income elderly on their Edgartown-Vineyard Haven Road property in Tisbury.

Commissioners stopped short of a vote to deny Hillside Village III, deferring the decision for further discussion at the MVC's next meeting Thursday.

The proposed addition to an existing 50-unit complex sparked protests from neighbors throughout the review of the project as a development of regional impact by the MVC. But after two hours of discussing potential conditions to mitigate the building's nitrogen loading, additional traffic flow and excavation impacts on three-quarters of an acre near the top of Clover Hill, five commissioners out of nine found themselves unable to swallow the detriments of a project.

"We need elderly housing. It's a tough call. I understand the need is forcing people to look in areas they wouldn't normally look, but we're trying to pour too much into this property," said commissioner Tristan Israel.

IEH officials modified the plan eight times over the last few months in attempts to alleviate the concerns of commissioners and neighbors, and by the end, IEH's architect questioned their ability to fund all of the agreed-upon changes.

The failure to approve last night followed a lengthy discussion during which the commissioners tentatively agreed to adopt an entirely new site plan - designed by Robert Schwartz, the new West Tisbury selectmen's appointee and a retired architect. The plan pulled the building 10 feet further down grade in order to save more vegetation atop the slope. But efforts to ease traffic congestion for neighbors on Clover Hill Road - in addition to minimizing nitrogen loading into Lagoon Pond from all of the existing 50 units in the Hillside Village complex - proved problematic.

"There are enormous density and ground water issues. I really have a problem with this concentration. We already have two very dense projects there," said commissioner John Best. "I wouldn't typically have a problem, but I don't think the neighbors anticipated it."

Neighbors feared that increased units intensified nitrogen seepage into Lagoon Pond. William Wilcox, the MVC water resources planner, said that Hillside Village III, with a proposed denitrifying filter, meets nitrogen loading limits for the Lagoon. Combined with existing 40 units in Hillside Village I, however, it would exceed the threshold for "outstanding resource water" classification in the Lagoon for the six-acre property.

Commissioners questioned their ability to require septic system upgrades for Hillside Village buildings already completed - and concluded that such orders would exceed their authority.

"The planning in this has been extremely poor. It could be a much better plan. The impact on the neighborhood seems huge to me," said Linda DeWitt, a new selectmen's appointee from Edgartown.

"I'm in a quandary, too. I think it's important that someone not from Tisbury say that. The more I listen I think this is more than ‘not in my backyard,' " said commissioner Paul Strauss, moments before casting the surprise vote that tipped the balance against the IEH project.

Even those voting in favor of the project admitted that the project brought a slew of detriments.

"This is not a slam-dunk, for sure," said commissioner Doug Sederholm, who voted in favor of Hillside Village III.

"It certainly would be better for the Lagoon if this were not built, and it would be better for the Lagoon if all the half-acre lots around it would not be developed either. Unfortunately, we have no control over that, so I'm weighing the benefits and detriments," said commissioner Christina Brown.

Voting to approve Hillside Village III with conditions were Christina Brown, Katherine Newman, Robert Schwartz and Jim Athearn. Commissioners voting to not approve were John Best, Linda DeWitt, Tristan Israel, Paul Strauss and Richard Toole.

In other news, the commission voted seven to two last night to approve a request from AT&T Wireless to erect a cellular phone tower on a 6.6 acres on Old Courthouse Road in West Tisbury.

The approval carried a condition that the tower be moved at least 300 feet from the two nearest residential property lines. Final approval of the tower hinges on a special permit from the West Tisbury board of appeals. AT&T Wireless also seeks a variance from West Tisbury to erect a tower 138 feet from the property line - 262 feet shy of the setback required by town bylaw.

While several commissioners expressed misgivings about the project, they deferred to the board of appeals to deal with safety and siting issues of local concern.