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Milk Chocolate-Walnut Coffee Cake

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8 tablespoons (1 stick) unsalted butter at room temperature

1/2 cup granulated sugar, plus 3 tablespoons

1/3 cup firmly packed light brown sugar

2 large eggs

1 teaspoon vanilla extract

2 cups unbleached all-purpose flour

1 1/2 teaspoons baking powder

1/2 teaspoon baking soda

1/4 teaspoon salt

3/4 cup buttermilk or low-fat plain yogurt

2 teaspoons ground cinnamon

6 ounces milk chocolate, finely chopped, or milk chocolate wafers

1 cup (4 ounces) chopped walnuts or pecans, toasted

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