Ambitious plans have been revealed for an empty Holme Valley textile mill.

The former Westwood Yarns site at Washpit Mills, Holmfirth, is set to be revitalised with plans for housing, a hotel and a restaurant.

And it will also provide a new home for the Carding Shed, Oil Can Cafe and IK Classic Cars, which aims to move from its base at Dobroyd Mills, Hepworth, when its lease expires next year.

Prospect Estates, the new owner of Washpit Mills, said the mill would be transformed into a “vibrant” community and workplace. Plans submitted to Kirklees call for 50 houses, converting the historic mill building into 12 apartments and redeveloping the Millpond building into a hotel and restaurant. Part of the office and workshop will be leased to the Oil Can Café and IK Classic Cars.

Owner Ian Kellett said: “We have an agreement with Prospect Estates for part of the development there. At the moment, we are waiting for planning to go through, but all being well we will move. However, there’s an awful lot of work to do before we even think of opening.”

The Carding Shed includes the Oil Can Cafe; IK Classic Cars providing vehicle storage and garage services; classic clothing store High Society; arts, crafts and gifts shop The Hepworth Emporium; and men’s vintage clothing and memorabilia collection The Retro Shed, which would all move to Washpit Mills along with the 50-strong workforce.

Chartered surveyor and property consultancy Sanderson Weatherall was appointed by administrators KPMG to market the Washpit Mills site in March following the collapse of specialist carpet yarns supplier Westwood Yarns with the loss of 135 jobs.

The property has 168,551sq ft of production workshops, offices and ancillary space set in an 8.54 acre site. The sale of the site follows an auction of most of machinery and assets which raised about £1m.

Prospect Estates Rob Cooke (left and Sanderson Weatheralls Craig Watson look over the plans for the former Westwood Yarns mill

Rob Cooke, regional acquisitions manager for Prospect Estates, said: “This is a historic and important site and we are keen to preserve as much of the original character of the mill as possible, whilst also attracting jobs and new residents to the area.

“The mixed use scheme we are proposing will retain around a third of the original floorplate, including the Millpond building and the Northern Lights workshops. We hope to begin work on site in early 2017, subject to planning permission.”

A spokesman for Sanderson Weatherall said: “Prospect Estates’ plans to redevelop the site will bring jobs and investment to Holmfirth and we are confident that this will be a very successful venture that will provide a significant boost to the town.”