Blueberry Cream Cheese Coffeecake

1 1/2 cups sugar, divided
1/2 cup plus 2 tablespoons butter, divided
2 eggs
2 1/2 cups flour
1 tablespoon baking powder
1 teaspoon salt
3/4 cup milk
1/4 cup water
2 cups fresh blueberries (OR 2 cups frozen, thawed, drained blueberries)
8 ounces cream cheese, cubed
2 teaspoons lemon rind, grated, divided

Cream together 1 1/4 cups sugar and 1/2 cup butter until light and fluffy; add eggs, one at a time, mixing well after each addition. Combine 2 cups flour, baking powder and salt. Add to creamed mixture alternately with milk and water. Toss blueberries in 1/4 cup flour; fold into batter with cream cheese and 1 teaspoon lemon rind. Pour into greased and floured 13 x 9 x 2-inch pan.
Combine remaining sugar, flour and 1 tsp. rind; cut in remaining butter until mixture resembles coarse crumbs. Sprinkle over batter. Bake in 375 degree oven for 1 hour.
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