。
I'm heading toward town, so I'll drop you off on the way.
Literal
I [topic-は] town [possessive-の] direction [toward-へ] running-[go-away-ていく] [reason-から] midway [at-で] you [object-を] let-off-[for-you-てあげる].
町の方 ('in the direction of town,' with 方 as 'direction'). ~てあげる is the benefactive for doing something for someone else (contrast ~てくれる for me, ~てもらう receiving). から gives the reason. 途中で ('on the way, midway'). 降ろす ('to let down, drop off').