SY Homes Ltd has applied to the council for outline permission to demolish parts of the Lord Hill Hotel on Abbey Foregate and create four townhouses as well as a number of apartment blocks in the grounds.
The original building, which is listed, would be retained but a function suite and kitchens built in the early 1970s, a two-storey extension built in the 1960s and conservatories built to the front and side in the 1980s and 90s would be demolished.
A planning statement submitted to the council on behalf of the developer, said the hotel was originally built as a single residence but over the years had been extended and converted in to its current use as a hotel.
The report goes on to say that the hotel has had a 'potted history' and has on occasions lain empty and unused, sometimes for years at a time.
The hotel was built prior to 1882 although a further accommodation block which stands at the bottom of the site was built around 1984. Under the plans this will be demolished.
The report says: "It is fair to say that the extensions are an array of haphazard piecemeal single-storey and two-storey additions which have significantly diluted the character and historic interest of the original listed building.
"Due to competition from out of town and alternative wedding, function and party venues, the hotel has struggled in recent years and indeed has been quietly marketed without interest being shown."
Although at present only outline planning permission is being sought and details such as the number of apartments and layout are still to be finalised, the applicant has said that there would be underground parking provided at the site and there would be extensive communal gardens with views towards the town.
The report added that the retention of the listed building is a 'key aim of the scheme'. The important elements of the building will be identified within the historic building assessment and will form the basis of the building and forecourt on to Abbey Foregate.
The hotel, which is also used by local groups and societies, is due to close on January 1. It was taken over by current owners Raymond and Vera Proctor in 2001 and news of its closure was made public in July.