"The proposed agreement among five parties outlines a series of actions that will put the borough in the position to make improvements to Central Avenue and Montgomery Alley," Borough Manager Eric Oyer said.
About $2 million of federal money will be spent on improvements to this area and near the Falling Spring, where the proposed Chambers Fort Park will go.
Oyer said last week if M&T Bank has any issues with the agreement he will bring it back to the council for amendment.
Parking is at a premium downtown, which is why it's taken four years to work out a plan that widens Montgomery Alley to 26 feet and also allows a wide enough turning radius for trucks heading to the rear of Harmon's Furniture.
The agreement calls for the borough to vacate part of Central Avenue from King Street 200 feet south, allowing the church to expand. The remainder of the road to Lincoln Way East would allow for two-way traffic, Oyer said.
Montgomery Alley also will allow two-way traffic from Second Street to Central Avenue. The rest of the alley to Main Street will be turned into a parking lot for M&T Bank, said Oyer, who described the agreement as a series of dedications and vacations.
The church will grant an easement for pedestrian crossing and guaranteed the county 13 parking spaces, and the bank will dedicate some additional land, he said.
Once the planning for the project was completed, the Pennsylvania Department of Transportation was to issue the funds because the project is intended to improve the flow of vehicular and pedestrian traffic in downtown Chambersburg, Oyer said.
But PennDOT has indicated it would allow the borough to put the project out for bid, which could speed up the process, he said.
Officials have said they would like to see work begin this spring.
"This has been a long, arduous task of getting a number of groups to agree," Councilman Robert Wareham said. "It's nice to see it coming to fruition."
The project dates back to 1995 and includes a park along the Falling Spring and Conococheague Creek, a metal bridge over the creek connecting the park to the proposed Rail-Trail, walkways, space for a veteran's memorial and parking improvements.