The plot - now dubbed the shingle pit by locals - between Fitzherbert St and Fox St was left empty after Chung's Supermarket was demolished in 2010.
Mr Moon said a popular idea amongst the community was to top soil and grass over the site as an area for recreational purposes.
However, the council was going ahead with a Town Square concept drawn up by Earthwork landscape architects, following last year's consultation with Featherston people as to how it could develop the vacant lot.
South Wairarapa Mayor Adrienne Staples, council chief executive Paul Crimp and Featherston ward councillors attended the meeting, held in the Kiwi Hall.
Mr Crimp said the Library and Information Centre, both historic buildings, were set to be painted in a "heritage colour scheme" in early December.
The Menz Shed would fund for and paint their own building in unity with the other two.
Mr Crimp said the initial site works on the Town Square were to start in about three weeks.
"And at the same time tender documents will be being processed and considered with which firms we're going to use."
He expected the build to be finished by the end of February.
"The only thing we have deferred is the central bandstand."
Mr Crimp said the stand's foundation would still be laid but the structure instalment would be put in at a later stage.
"The cost is one of the aspects and we need to look at the design, which was a bit more complicated than we anticipated."
Mr Crimp said it was an "exciting project" and the council had "managed to work with the budget so we still get the main concept".
However, Mr Moon said there were a lot of "strong feelings" amongst ratepayers as to whether the Town Square plans should go ahead.
"There is a lot of for and against spending so much on the town centre.
"A lot of people want that area kept available for future commercial development."
Mr Moon said the site was one of the only sites in the town suited for commercial development.
"Other open spaces are recreational areas and can't be built on."
He said one of the main themes that came through from Monday's meeting was the "council's lack of transparency and communication with ratepayers" over progress in South Wairarapa.
Mr Crimp said the council had taken on board suggestions as to how it could be more effective with its communications to ratepayers.
"We're certainly going to be looking at doing things differently and better in the future."