Move oven rack to upper-middle position and preheat oven to 350 degrees F. Put 4 tablespoons of cut-up butter in 13 by 9-inch baking dish and transfer to the preheated oven. Heat until butter is melted, about 8-10 minutes.
While butter melts, in a small bowl add ¼ cup granulated sugar and lemon zest. Mix and mash with a fork until zest is evenly distributed throughout sugar; set aside. In a medium bowl add blueberries and 1 tablespoon of lemon sugar mixture. Using a potato masher, mash blueberries until berries are coarsely mashed.
In a large bowl whisk together flour, remaining 1 ¼ cups sugar, baking powder, and salt. Whisk in milk and 8 tablespoons melted and cooled butter until smooth and no lumps remain.
Take the baking dish out of the oven and pour in batter.
Using a spoon, dollop masked blueberry mixture over batter, sprinkle remaining lemon sugar evenly, and bake until golden brown and edges are nice and crisp about 45-50 minutes.
Move to a wire rack to cool 30 minutes before serving.