You cannot use "were" to replace "to be", because it would make the sentence ungrammatical. You could however use "that were" to replace "to be".
In the original sentence, the subject is "the first textile mills to be estabilished in the US" and the predicate is "were located in New England".
The sentence says:
There were textile mills estabilished in the US. The first ones were built in New England.
- For Teachers