Sir Ernest Hall, who has died aged 94, led a remarkable renaissance in a struggling northern town, transforming the world’s largest carpet factory into a beacon of art and enterprise working together, with striking benefits to both. He gradually converted half a mile of derelict Victorian buildings in central Halifax into what he called a practical utopia, where makers of polythene bags rubbed shoulders with staff from the Henry Moore Foundation.

Dean Clough Mills was vast enough, but the “Hall effect” rippled out to other once glorious behemoths including Salts Mill in Saltaire near Bradford, where his former business partner, Jonathan Silver, worked similar magic. Each example showed the mix of commercial nous and artistic sensitivity that marked Hall’s own personality; he played as a concert pianist while pulling off lucrative textile and property deals.

His start in life could hardly have been less promising. He was born in central Bolton to two cotton mill workers, Mary (nee Mann) and Ernest Hall, at the start of the 1930s recession that brought his parents bouts of unemployment and faltering attempts to make a go of a bakery. His defining moment came at the age of eight when a visitor brought a gramophone to his school, St George’s Infant and Junior, and played Sibelius’s Valse Triste while telling the music’s spellbinding story of ghostly guests at a grand ball.

Nine years later, Hall was accepted by the Royal Manchester College of Music (RMCM), where he studied alongside the future leader of the Hallé Orchestra Martin Milner and, significantly, the outstanding young pianist and composer John Ogdon. Hall’s later advice to his five children – never to compare themselves to apparently more successful contemporaries – owed something to his discouragement at the time. Unable to match Ogdon, he abandoned hope of becoming a professional musician.

He left the college in 1951 for national service and then office work across the Pennines where he took with unexpected verve to life in Mountain Mills at Queensbury above Bradford, makers of high-quality worsted woollen suiting, a product with important links to the international world of fashion. When his rise within the firm culminated in his leading a management buyout in 1961, youth was besieging the clothing market and Hall loved it. He had a lifelong collection of natty Savile Row suits and in his 80s shopped at Pollyanna in Barnsley for brands such as Comme des Garçons.

The mill’s success brought him his first fortune, which was followed by a larger one from property development, especially after he recruited Tony Clegg and formed Mountleigh. Their canny deals included buying 800 houses at a bargain price in 1981 on a redundant part of the US Air Force base at Lakenheath in Suffolk. Two years later Hall left Mountleigh and invested £20m in Dean Clough, where the business world expected a conventional demolish-and-redevelop to follow.

Instead, in a gradual process lasting more than 30 years, the “practical utopia” took root, and still flourishes under the direction of Hall’s eldest son, Jeremy, with more than 150 tenant companies employing 4,000 people. Its success gave a fillip to the classy restoration of the nearby 18th-century clothiers’ Piece Hall market in Halifax and helped to bring Vivien Duffield and her national children’s museum, Eureka!, to the town.

Hall was conscious of the vast philanthropy of his wealthy predecessors, the Crossley family who built Dean Clough, and the way that the Mackintoshes (toffee makers of Quality Street and Rolo) had encouraged their Halifax workers to be inventive and suggest improvements. His choice of book on Desert Island Discs was the complete works of William Blake, who coined the concept of a new Jerusalem rising amid the mills.

He was knighted for services to the arts in 1983 and won the Albert Medal of the Royal Society of Arts the following year, serving as chair of Yorkshire Arts and Northern Ballet, and on the Arts Council. He was awarded 12 honorary doctorates and from 1996 to 2004 was chancellor of the University of Huddersfield, the home of superfine worsted cloth. But his energies and trademark enthusiasm now turned back to music and his unrealised plan to make it his principal work.

He recorded all Béla Bartók’s works at the age of 65, and all Frédéric Chopin’s piano pieces five years later, and played Ferruccio Busoni’s Piano Concerto with the Sheffield Symphony Orchestra in 2003. He composed two piano sonatas and encouraged artistic and musical interests in his children, who were sent to school at Dartington in Devon.

Hall met his wife, June Annable, at the RMCM and they married in 1951 and had two sons, Jeremy and Tom, and two daughters, Virginia and Vivian. After the couple divorced, he married Sarah Welby in 1975 and they had a son, Leopold. On full retirement from Dean Clough in 2007, Hall moved to Lanzarote and built a small concert hall next to his home, before returning to the UK in 2021.

He is survived by Sarah and his children, and 14 grandchildren.

• Ernest Hall, musician and entrepreneur, born 19 March 1930; died 3 August 2024