Fox Animation Studio Will Be Built in Phoenix : Hollywood: Arizona entices the company with $1 million in job training funds and low-interest loans.

Twentieth Century Fox said Monday that it will build its new 300-employee animation film studio in Phoenix after Arizona offered the company about $1 million in job training funds and low-interest loans to buy state-of-the-art digital animation equipment.

The decision marks the first time one of the big Hollywood studios has located a significant operation in Arizona, and it is another reminder that Southern California does not have an exclusive franchise on movie-making operations.

Fox plans to invest about $100 million in the new subsidiary, Fox Animation Studios, which is expected to produce an animated feature every 18 months.

Although California was one of five states originally considered for the studio, Fox and state officials acknowledged that it stood little chance from the start because executives involved in the project wanted to live away from Los Angeles and its traffic jams.

“This wasn’t an indictment of the business climate in California, but rather a very personal quality-of-life issue for the people involved at the helm of the animation operation. California wasn’t really in the running,” California Film Commission Director Patti Archuletta said.

Fox President Bill Mechanic said such California cities as San Diego, Santa Barbara and San Francisco were considered. He said Fox executives wanted the operation close to its Westside studio and concluded that Phoenix, an hour away by plane, was close enough.

Fox officials also said Phoenix was chosen for “lifestyle reasons”--namely low housing costs and short commute times that they feel will help attract and keep workers--and because Arizona offered a favorable “business climate.”

The final decision came after Fox narrowed the search to Phoenix and Spokane, Wash. Texas and New Mexico were considered briefly.

Ironically, the decision to put the animation operation in Arizona comes as industry leader Walt Disney Co. has been rapidly expanding its animation operation in Southern California, with plans to consolidate it into a new building this fall at its Burbank lot. But even Disney plans to start producing some of its full-length animated movies entirely in Florida starting later this decade.

Fox is forming its animation operation in a deal with longtime animators Don Bluth and Gary Goldman, whose films include “An American Tail,” “The Land Before Time” and “All Dogs Go to Heaven.”

Fox wants to gain a major foothold in animation despite Disney’s domination. Animation has enjoyed a huge resurgence thanks largely to highly profitable Disney films such as “The Lion King” and “Aladdin,” the exploding home video market and the growing appetite for family films.

Arizona’s sweeteners include a $650,000 low-interest loan from the state’s Commerce and Economic Development Commission over five years to buy the animation equipment.

Another $100,000 in job training funds have been committed, with another $200,000 sought subject to funding by the state Legislature. Another $150,000 in other incentives is expected.

Fox is expected to invest about $5 million in the Phoenix studio. In addition, it plans to spend $1 million to improve a 60,000-square-foot building there.