CHARLOTTESVILLE -- It may be 2006, but the atmosphere at Tuel Jewelers is vintage 1945.

"We have the same display cases in our store that we had in 1945 when the store opened," said Mary Loose DeViney, vice president of the family-owned and operated store. "We have the same watchmaker and jewelers' benches that were in the store. We even have a manual cash register out front where we ring up all of our sales."

The full-service jewelry store represents a growing sector of the business community in the city of Charlottesville.

"We have lots of locally owned businesses," said Chris Engel, economic-development specialist for the city.

The downtown pedestrian mall, where Tuel Jewelers is located, houses an array of businesses that include retail establishments, restaurants and entertainment outlets. But that district is just part of the city's economic base. Within the 10-square-mile city limits are a variety of businesses, focusing on everything from education and health services to state government and leisure.

"The University of Virginia is a big part of the economy here," Engel said. "We try to attract companies that spin off from U.Va. - professors who have a patent and decide to open a company. We try to capture that business and locate it here."

Indoor Biotechnologies is one such company. Martin Chapman formed the company in 1997 out of technology he developed as a tenured professor at U.Va. The company is the principal worldwide supplier of laboratory tests for measuring allergens.

"We now have 14 employees in Charlottesville and another branch of the company in the United Kingdom," Chapman said.

Indoor Biotechnologies isn't in a biotech park like other companies of the same ilk. Instead, it's in a light industrial area.

"The location is convenient," Chapman said. "We wanted to be in the city and near the university for collaborative purposes."

According to Engel, about 700 businesses were added to the economic mix in the last year.

"Most of those are small businesses with one or two employees," he said. "Businesses are attracted to our quality of life and the uniqueness of Charlottesville as a place to live."

That fact hasn't gone unnoticed. The city landed the No. 1 ranking on Southern Business & Development magazine's 2005 list of 10 "Really Cool Small Southern Markets."

The article referred to Charlottesville as a sophisticated market and great business location.

Morgan MacKenzie-Perkins, who opened Sage Moon Gallery on East Main Street in the pedestrian mall, agrees with the magazine's description of the city.

"This area is transitioning," she said. "I see the energy shifting."

Information and service solutions provider LexisNexis is another advocate of the city. The company, which has headquarters in New York, bought the Charlottesville-based Michie Co. in 1988. Michie, founded in 1897, is best known for publishing code-statute information for lawyers.

"We bought the company because it was an opportunity to own content rather than license it," said Ed Gould, senior vice president of LexisNexis.

The company has two buildings in the city - one on the pedestrian mall; the other, a manufacturing site, is less than a mile away.

"Being in Charlottesville gives us access to a good work force," Gould said. "We're actively involved in the community and invest in it. We feel we have a legacy that we can continue on."