In November of 2014, Phase 1 was completed. Downtown Greenway Corridor phase 1 took place between MacDonald Drive and Bay Street, along with the re-construction of Arlington Avenue from Rose Street to MacDonald Drive. Improvements within the Greenway Corridor portion of the project include a 10' wide concrete path, trailhead parking, road crossings, benches, and interpretive signage. All improvements will be of universally accessible design.

The re-construction of Arlington Avenue will include replacement of underground sanitary and stormwater infrastructure as well as full replacement of all asphalt and curbing on the roadway. A continuous sidewalk along the south side of Arlington Avenue will be included as part of the project along with connector sidewalks in various locations to the Greenway Corridor trail that will parallel Arlington Avenue. All overhead electrical wires thru the corridor will also be buried as part of the project.

In addition to serving Petoskey's resident population, the Downtown Greenway will help support the City's goal of offering additional recreational amenities and non-motorized trails for City residents that connect neighborhoods together. The North Segment proposed project is the first segment of a Downtown Greenway that will directly connect with the 26-mile long Little Traverse Wheelway and adjacent neighborhoods with the retail, commercial, recreational, and cultural assets of downtown Petoskey.

The City has a long history of involvement with the greenway corridor. Although the former rail corridor through the heart of downtown was owned by MDOT until March of 2011, the City has maintained the right-of-way for many years so that it appropriately reflects the character and quality of its downtown. The City began negotiations with MDOT approximately 25 years ago to purchase 1.17-miles of former Penn Central Railroad right-of-way. The purchase was finalized in March 2011.