A group of Raleigh developers and a Washington real estate firm have been selected to build a 125-room hotel on Hillsborough Street across from the N.C. State University Bell Tower.

N.C. State officials announced the selection of Bell View Partners and The Bernstein Companies on Tuesday.

The university’s endowment fund has spent the last several years buying up property across from the tower in an effort to make the site more attractive to developers.

The project is the latest in a flurry of redevelopment activity along Hillsborough, which was given a $10 million makeover by the city last year.

Earlier this month The Brewery, a popular live music venue, was demolished to make way for a drugstore, a parking deck and apartments.

N.C. State began soliciting redevelopment proposals for the 1.3-acre of property it owns in the spring.

The hotel would include ground floor retail and a restaurant.

The project would occupy the stretch of Hillsborough between Enterprise Street and Maiden Lane, replacing both Sadlack’s Heroes and a retail center that is currently home to Schoolkids Records.

Greenfire Development has applied for $25 million in federal stimulus-allocated bonds that would be used to convert downtown Durham’s SunTrust Tower into a 165-room boutique hotel.

If approved, the bonds could jump start a key project that has been stalled for several years by the credit crunch.

If local and state officials approve Greenfire’s request, the developer would then market the bonds to investors. The application says construction would begin in October if the bonds are awarded.

The developer’s application states that the project, called Spark Hotel & Spa, would be part of Starwood’s Luxury Collection and would be managed by Interstate Hotels and Resorts.

Carl Webb, a partner with Greenfire, said the Starwoods deal has not been finalized. The deal with Interstate Hotels and Resorts has been.

The $25 million in bonds would cover half the cost of the project. Greenfire would need to raise the rest of the money from other sources.

The SunTrust Tower, also called the Hill Building, is among the trophies in Greenfire’s portfolio. The company owns more than 30 buildings in downtown Durham and about 900,000 square feet of space.