The plan describes a 25,000-square-foot building with a lounge and 60 parking spaces. The plan also listed it as a Best Western motel.
"Nothing is cast in stone," Bernard L. Washabaugh II of B.L.W. Enterprises said Wednesday before the meeting.
He said his company is still negotiating with the motel chain.
Washabaugh said his company has done a preliminary feasibility study for the project. He said no schedule has been set for construction, but it could begin later this year.
Gerald A. Crist Jr., of 292 Stonegate Circle South, said his street has trouble with stormwater runoff and the motel could worsen the problem.
Borough Manager Eric Oyer said borough engineers believe the motel will not worsen the runoff problem.
The council approved the plan, amending it so the developer will not be required to put in curbing along Limekiln. Two council members abstained, including Council President Bernard L. Washabaugh, the developer's father.
"The motel owners tell me they don't have the occupancy they want now," Rhone said of existing motels.
"Five years from now, what will it become, a $25 flop house?" he said.
Brian Moore, the general manager of the Fairfield Inn in Chambersburg, said the number of motel rooms in Chambersburg increased from 613 in 1996 to 747 now.
During the same period, Moore said the market remained flat with occupancy rates below what the motels want.
Bernard L. Washabaugh II, who was not at the meeting, said Wednesday the site is in an area of the borough that will see rapid development in the next few years.