Ep 35: What is Tatu City? (w/ Preston Mendenhall)

Show Transcript

Seyi (00:00)
Hello, hello, hello listeners. Good morning or good afternoon wherever you may be. It's Seyi and it's another episode of Future Forward and today I am excited to have Preston Mendehal and I'll let him give his background but we will be talking about Tatu City today. Listeners remember we've mentioned Tatu City before and we thought

to get a deep dive on this fascinating project, one amongst many we thought we'd bring Preston on today. So welcome, Preston.

Preston Mendenhall (00:33)
Seyi thank you. Very good to be with you. I'm joining you from Lagos today.

Seyi (00:37)
That's fantastic, fantastic. My stomping grounds for a good chunk of my early years. So I'm excited you're visiting my, what I still consider home, honestly. For new listeners of Future Forward, welcome. Thanks for joining us. For our regular listeners, thanks for coming back. As we say, Future Forward has been a...

conversation Reza and myself have been having for years and we thought, you know, let's bring the community in. It's an exploration of the history of cities, the current state and future possibilities for how we build thriving communities and sustainable cities. And it feels like that's what's been built at Tatu City. So before we dive right in,

Preston, I'd love to get a little bit of your background. You've been everywhere. So it would be fascinating to get your perspective on cities as well. But please share your background and then we'll dive into Tatu City.

Preston Mendenhall (01:40)
Thanks, Seyi. I'm originally from Colorado, American, but had been living outside the United States for more than 30 years now. So I went abroad and started as a journalist working in former Soviet Union, Eastern Europe, but covering stories around the world. And that really gave me a bug for travel, witnessing history, and then made a great transition out of journalism into marketing, public affairs, and...

Seyi (01:44)
Yeah.

Amazing.

Preston Mendenhall (02:05)
now to building new cities in Sub-Saharan Africa. So working for Rendeavour for 14 years now. And I'm the country head at Tatu City in Kenya for Rendeavour. And we have our projects also in Nigeria, Ghana, Zambia, and DRC.

Seyi (02:23)
Fantastic, fantastic. So I guess the first question, what is Tatu City?

Preston Mendenhall (02:29)
Tatu City is an entirely new city. when we have said that over the last 14 years, at the earliest age, it sounded like a crazy dream. And I would say in order to build new cities, you have to be a little bit crazy and see something that isn't there yet. And what Tatu City has evolved into now is really, truly a new city on Nairobi's doorstep.

Seyi (02:38)
Yeah.

Preston Mendenhall (02:50)
We're 5,000 acres. We are a special economic zone, although we didn't start out as one. We now have great benefits for companies that come in and set up, so tax incentives, for example. But we have schools. We have 5,000 students a day who study at international and local schools. We have more than 3,000 apartments, homes that are completed, many more thousands under development.

We have businesses, more than 90 businesses, and offices and retail. And actually just last week, I'd say is probably one of the most important events in the history of Rendeavour and all of our cities, first grocery store. It can't be a city without a grocery store. So we had the first one open up in Tatu City. So the concept with all of our cities in Tatu is that it's a live work play concept.

Seyi (03:28)
Wow, absolutely.

Preston Mendenhall (03:39)
You don't have to leave the city. You don't have to have long-distance commutes into the neighboring city. In the case of Kenya, that's Nairobi. And you can have an office. Your kids can go to school. You can work from home, all in a very well-organized environment.

Seyi (03:54)
So it's fascinating. I love how you framed it as you do need to be a little bit crazy to say, I see a city here in a place where there's typically nothing. What was the impetus for deciding to build in these countries? Because it's not typical.

Preston Mendenhall (04:13)
No, not typical at all. We're long time emerging markets investors, so we've gone into markets at early stages to build businesses. We're a commercial venture in Sub-Saharan Africa and what are the core drivers of the business are three things. It's economic growth, so we're in high growth markets. Typically all of our markets in Sub-Saharan Africa are growing above 4%, sometimes above 5%, sometimes above 6%.

Seyi (04:15)
Yeah.

Yeah.

Preston Mendenhall (04:41)
Demographic growth, we're in rapidly growing populations. And urbanization is the third pillar. we are, Africa is the fastest urbanizing continent currently and probably will be in history. So that rural to urban migration, putting pressure on existing cities. And in order to relieve that pressure, which leads to lot of congestion and uncontrolled development, which is what you see in all the main cities we're around,

You need to create nodal developments, so developments outside the city center that take the pressures of urbanization off the city. These are things that we've typically seen everywhere in the world. So over the last 40 to 50 years in Asia, new communities, new cities built outside of existing city centers. We've seen it in Europe, the United States, over the last 100 plus years. You know, in the US we might call it, it could range anything from satellite city to just a good big suburb.

where you've got schools, you've got houses, and you don't have to go into the city center anymore.

Seyi (05:41)
So thanks for framing it that way. So you would say it is more of a suburb than like a charter city. Is that, how would you frame it? Because initially when we'd started looking into Totsiti, we were framing it as a charter city.

Preston Mendenhall (05:59)
That's right. It's something in between. is in terms of the size and scale, it is a new city on 5,000 acres. All of our developments are at least 5,000 acres. So they are very, very large scale. They have multiple areas for commercial districts, residential districts. They're very large. In terms of being a charter city, the charter city concept is usually that you're completely separated in terms of your laws and governance.

perhaps even from the country you're in. That's not quite the case with us, but we do have a high degree of autonomy within our cities. So for example, our ability to set the speed limit, service charges, levies on to make sure that the road infrastructure is fixed. We have our urban planning rules. So just in terms of...

the land use within our cities. The land is private and we're kind of like a private municipality. But what we don't have is a judiciary and law enforcement and that's what we rely on the national governments for. So we're very integrated into the surrounding, both physically integrated but also integrated into the countries themselves.

Seyi (07:07)
That is fascinating. that actually brings up two quick questions. You mentioned integrated, which means the local communities are a part of the thinking for Tata City and the other cities you have. The first question is, what's been the typical response of the

local communities around where you've chosen to build. And then the second question is around the infrastructure, because it sounds like you're an active step to provide infrastructure that might not otherwise be available in the local communities prior to you building Tata City.

Preston Mendenhall (07:52)
Yes, so I'll give the example of Tatu City, but it's not unlike the other cities we're developing as well. Tatu City's next door neighbor is called Rui Rui, which is a town. When we first acquired the land back in 2008, it was a pretty sleepy town. Now it is the sixth fastest growing town in all of Africa.

with over a half a million population. So that population ranges from being informal in formal settlements or formal buildings, let's say formal structures to some being an informal. But what we have at Tatu City is there's no wall or fence between us and Rururu and the surrounding communities. We've long understood and understood this was the only way we could build.

with the support of local community is to be very fully integrated. When we look at the security of our cities, all of the security, 100 % of the security, unarmed security is recruited from the local community. So we have a high degree of buy-in. We're putting wages into the community every month.

Seyi (08:49)
Wow.

Preston Mendenhall (08:55)
In addition to that, there are public schools around us, government schools. We support them with meals programs. So you might have a security officer that is working in Tatu City. Their child is going to a school where they get a free meal a day, a high-nutrition meal. Their grades in school are going up.

They're staying in school longer, they have more opportunities. So all of this ties in together and contributes to the security and then also our integration with the local population. We're building in Tatu. We've already actually, last year we opened a 20 acre park that has the best playground equipment in all of Kenya. It's got an outdoor gym as far as we know, it's the first outdoor gym in Kenya. Basketball court, five side football court, that's inside Tatu City, but it's open to the local community.

Seyi (09:34)
It can't be a wow.

Preston Mendenhall (09:40)
We're doing a very large plaza. Again, no fence around it. It's fully integrated.

Seyi (09:46)
Fascinating and sounds like you also thanks for sharing that that is so cool. Sounds like you also have your own infrastructure in terms of energy and water. So what was the thinking there? And is this a how are those things sort of maintained because it does take a lot.

to run your own utility.

Preston Mendenhall (10:09)
Yes, yes, so far in Tatu City there's been over $400 million of investment, our investment, so that has been in the land and the acquisition in

the team that's required to build the city. But to your point, most of that investment goes into infrastructure at the early stage. That's creating a platform on which anybody, an individual, a business can come in. And what we like to say is there's a normal operating environment. If you're a business, you come in and you're only focused on business. You don't have to worry about land title quality, which is an issue in Africa, but in all emerging markets, I would say to some degree. You don't have to worry about planning controls.

somebody's not going to come and put up a filling station next to your dream house or next to a school or something like that. Everything is highly controlled. That infrastructure means that we run and own the utilities businesses within our development. So the power, water, waste, ICT, and we maintain it. So that does create a difference in terms of what happens outside of our cities where the

Seyi (10:49)
home. Yeah.

Preston Mendenhall (11:10)
the infrastructure utilities might be underfunded or undermaintained and they're not able to keep up with the population growth and urbanization which I mentioned. But inside Tatu City really everything works because we're maintaining the infrastructure. What does this mean? We have power supply that is either, we either do take from the national grid and or we have our own solar or gas hybrid power that we produce ourselves.

So you have a tattoo city as an example, have 99.7 % power uptime.

The power is extremely reliable. Water, another key issue, we do all of our own water treatment. In Kenya, the land that we have is actually coffee estates that we acquired back in 2008. They are, we remain, even though we're developing a city, we maintain the the coffee production, and we remain the largest producer of coffee in Kenya. So how does that relate to water?

Seyi (12:04)
wow.

Preston Mendenhall (12:06)
The legacy of those coffee estates, there's dozens of dams within the estates and so we're able to treat that surface water. So Tatu City is the only location in Kenya which has 24-7 potable drinkable water. ICT, we have excellent fiber connections so they're all underground already and obviously the businesses and people are using them. Now that infrastructure is quite interesting because inside

tattoo city of this great infrastructure and outside you have infrastructure that's less well maintained or needs more investment.

We have started to bring our infrastructure outside of Tatu City. So it's a regulatory issue. we have to get permission from regulators to distribute outside of our boundaries. But we've done that now with fiber infrastructure. So internet connectivity. We've got miles and miles of fiber that we've taken outside of Tatu City. We've provided at a lower cost. We think the quality is better.

to bring water outside of Tatu City because that resource, there's not really a water shortage in Nairobi, but there's a problem with water distribution in the municipalities and how they manage it. So we want to bring our water out to the communities as well.

Seyi (13:08)
Audible.

Yeah.

Yeah, that thanks. Thanks for sharing that. It's so Reza and I, one of the things we did as we started to work on the podcast, we're working on a book now as well. We, we dug into a lot of the articles, research books about cities and pulled out a few laws and you just highlighted one that I thought it would be great to.

point out here and it's that regional cooperation enhances sustainability. That point you made about starting to take some of the infrastructure you've built into the surrounding communities. It's almost as much as a yes, you're doing this for the community, but it actually helps to keep Tatu City.

well integrated into the environment around it, the communities around it, because you don't want, I grew up in Lagos, what you don't want, and what I can imagine you probably thought about as well, is you don't want this zone that is very much living in the future and all around it is everything else, because the sense of security that you...

have start to erode a little as the people can see what they're not getting. The people around it can see what they're not getting and you start to lose the the cooperation maybe is is the word there. I can imagine that was part of the concentration as well.

Preston Mendenhall (14:48)
Yep.

Yeah, early in this project, and Tatu City's really been the front runner of our developments in Ghana, Nigeria, Zambia, DRC. Early on, we made mistakes. So early on, had advisors, international advisors telling us to do certain things that in the end we realized didn't make sense for what happens in Dubai is not what should happen in Kenya as far as developing entirely new areas and cities.

Seyi (15:11)
Hmm.

True.

Preston Mendenhall (15:18)
So what are some of those mistakes or how have we evolved? We understand now that we're not an island. And that's probably, that was the mentality at the beginning. We're more like an oasis where anybody could, if you're not living there, you're welcome to come and enjoy everything that is there. But more and more, it's that deeper integration where we can provide services outside of Tatu City. We're a private investor. If we can do it.

Seyi (15:33)
Yes. Yeah.

Yeah.

Preston Mendenhall (15:46)
better than the current government or if Nairobi obviously needs time to catch up on its infrastructure, it's been growing at high, high speed for many years and will continue to do so. If we can ease that burden on infrastructure, we do that as well. So the provision of water, the provision of internet infrastructure, ICT infrastructure are big ones.

Seyi (15:57)
Yeah.

Preston Mendenhall (16:07)
There's actually another phenomenon that you see because people come into Tatu City if you don't live here. So about 25,000 people a day are working at Tatu City. And there's about 5,000 people who live at Tatu City. So a lot of people coming in and out for work. When you come into Tatu City, the first thing you get when you drive in is a card which says, this is the speed limit, these are the rules, and there are fines if you don't obey them. And so the speed limit is, let's say outside of Tatu City, there are virtually no speed limits.

Seyi (16:15)
wow.

Preston Mendenhall (16:36)
and if they are they're not enforced inside Tatu City. Cars are going 15 miles an hour, 20 miles an hour. We have our own traffic marshals, incidentally, who all come from the local community, radar guns, and they will give traffic fines. So when you have that kind of rules and orders, people start to question, why isn't it the same? Why isn't it as nice and calm? Outside Tatu City, it is inside.

Seyi (16:36)
Yeah, yeah.

Yeah.

Yeah.

You

Preston Mendenhall (17:02)
So it starts a conversation about how the rest of the markets can improve.

Seyi (17:02)
Yeah.

Do you find that it is a lot more, or well, maybe the better question is, do you have public transportation as well, or it's purely driving your own cars into Tata City?

Preston Mendenhall (17:25)
So we just started, smiling because it's been four months now where we've had our first, like I called it Inner City Bus Network, where if you come to Tatu City at seven in the morning, there are literally thousands of people coming in, walking into work. So we did a pilot where for the first three months we had a free bus service and it was overwhelmingly successful because it allowed people to hop on and get to work faster, to get in maybe one or two miles and just made their lives a bit easier.

Seyi (17:32)
Mmm.

Hmm.

Yeah.

Yeah.

Preston Mendenhall (17:54)
Then we did a survey. Everybody knew that there was going to be a charge at some point. We did a survey of what people thought they should pay for it. the main respondents or the main data was 20 shillings, about 10, 15 cents. And we've just started charging for that as well. So within the city, we're providing transport. And then we want to expand that so it loops outside and can collect more people who come in for work every day. But then it's all.

Seyi (17:57)
Yeah, yeah.

Yeah.

to work.

Preston Mendenhall (18:22)
then it's also a service for the people who are living.

Seyi (18:24)
That is fascinating. I'll shift a little bit as we're coming to a close a little bit here. You've obviously lived and worked around the world. What are the things you've picked from the favorite cities you've lived in that you're trying to hope gets integrated into living in?

in Tatu City and I guess you can also answer that from a perspective of this is what makes a great city and these are the things we're trying to integrate here.

Preston Mendenhall (18:56)
I'd say lifestyle is a great driver for a city. So what is the kind of lifestyle that you...

can have when you're there and how wide a spectrum of people can you cover with that lifestyle. So from a lifestyle perspective, I think it's about green spaces, open spaces. And those kind of things are critically lacking in our markets. I've lived in cities around the world and some of them have these sort of fantastic public amenities, huge parks where you just find hundreds, thousands of people on the weekends after work. And that's critically lacking in our markets. And so we

Seyi (19:13)
you

Preston Mendenhall (19:30)
have our own policy, at least 20 % of all the land is green space and open areas, public spaces. And what that's meant at Tatu City to be kind of in the privileged position of being able to influence that, two weeks ago we had a mountain bike race with 500 riders. We've had a half marathon at Tatu City. We've been connecting our trails within Tatu City.

60 miles of trails within the city. Then I mentioned the children's play equipment, the basketball court, five-a-side, soccer, those kind of things. I think that's what makes the city, because you just see how that pulls people in and gives either people who are residing nearby something to come into, an amenity to join or to enjoy, or it's something for the residents.

Seyi (19:56)
Hmm. Hmm.

You did.

Fantastic. Another law, one of the laws we pulled, urban greening enhances the quality of life and sustainability. That is absolutely true.

Preston Mendenhall (20:21)
okay. Yes.

Yes. And in Kenya in particular, it's one of the most beautiful landscapes in the world. I grew up in Colorado, which is a really beautiful place. Kenya is right up there. So whether it's these indigenous trees that are everywhere, whether it's the wildlife, whether it's the weather where it's basically the same temperature all year round.

Seyi (20:29)
Yeah. Which is beautiful. Yes.

Yeah.

Preston Mendenhall (20:45)
and sunny as well. It's really an ideal environment to be in.

Seyi (20:49)
That is fascinating. I'll dig a little deeper. What's your favorite city? And you can't say Tatu City.

Preston Mendenhall (20:55)
My favorite city, I lived in Moscow for many years when I was a journalist and then working later.

Seyi (20:59)
Hmm. Yeah.

Yeah.

Preston Mendenhall (21:02)
So because I spent so much time there, I got to see Moscow go from being a pretty dreadful place to live, where pedestrians didn't matter. It was all about cars. Russia came out of the Soviet Union and just a lot of uncontrolled growth. But in the last 15 years, 15, 20 years, there's just been a huge effort to beautify it and make the parks, create parks, make things.

pedestrian friendly and it's a city where it's one of the cities where I spent the most time of my career so for that reason I really like it.

Seyi (21:35)
That's great. That's Preston, we're coming to a close here and I'm personally interested in Tatu City. So this is fascinating to me. What would you, to our listeners on the continent, in the US where we sit, in Europe where we do have a few listeners as well, where just...

a little shy of 7,000. think this will absolutely, this episode will get us over 7,000 subscribers. So I'm excited about that. But what would you like a very informed audience to take away as a...

as a framing for what is going on with, I guess, Tata City, but Rendevo projects and the opportunities that exist for people to come live in your cities.

Preston Mendenhall (22:19)
We've created an environment where you can have your home if you want to come and move completely to a new city in Africa. That's possible.

If you want to have a second home, somewhere where you want to have a bolt hole, somewhere where you can go and spend some time, if you want it to be a rental property, an income earning property, it's all there. That's what we create. So you can have something that's safe and secure in terms of your investment. You know that you can leave it and everything will be fine while you're away. That's an issue everywhere in the world, not just about Africa. So it's that kind of environment.

Seyi (22:54)
Absolutely.

Preston Mendenhall (22:56)
And when we look at, we have a lot of returning diaspora.

who are looking to come back to the continent after a successful career in the US or Europe. Maybe they went for university and then suddenly 20 years pass and you're feeling a longing for home. That's a very important constituency for Rendeavour and Rendeavour cities. So we do spend time in the United States, in the UK where we find

Australia, we've got a trip coming up. Our team goes and talks to members of the diaspora, and they can be either regional or specific to a country and are able to buy a property and move there or bring their life back to Kenya, Ghana, Nigeria after many years abroad.

Seyi (23:31)
Yeah.

Thanks so much. Thanks so much. I can attest to what you just said. That is literally the story of myself and a bunch of friends. just the vitality and the youth. Because I believe many of our listeners already know this, but Africa has the youngest...

population anywhere on any of the other decades younger than some of the other continents. And that just speaks to possibilities as far as I can tell. So I commend you on the work with Tata City and the Rendeva projects generally. I first heard of Tata City on the Tyler Cohen podcast.

Preston Mendenhall (24:08)
Yes.

Seyi (24:24)
a few years ago and it's...

Fascinating to see how it's grown since the first time I heard it. And thanks so much for coming to share more with us here today.

Preston Mendenhall (24:38)
I appreciate the opportunity. There's so many things happening now. Maybe we can conclude. give you two anecdotes. One is one of the owners of a house in Kajani Ridge, which is one of our residential areas in Tatu City. Yeah, thank you. He's got the same house in Atlanta.

Seyi (24:51)
Beautiful.

Preston Mendenhall (24:55)
He was in Atlanta 20, 25 years. He and his wife came back with the kids to Kenya and they were able to establish the same kind of lifestyle that they had in Atlanta. I'm sure Tatu City is better. But that kind of controlled environment where their investment is safe and doing well. They just don't have to worry about anything. Another one is just next month will be the opening of HQ Kenya House.

Seyi (25:07)
Yeah.

Yeah.

Preston Mendenhall (25:21)
Now HQ is a members club in Washington DC that was founded by John and Mike Burns, serial African-American entrepreneurs. The club has been exceptionally successful in Washington DC and they're expanding it to the continent. we've had some initial open houses, but the official opening is in the middle of March. So you have that kind of, we're looking at that bridge between

Seyi (25:46)
Yeah.

Preston Mendenhall (25:46)
The United States and these two examples between the United States and Africa, Kenya, HQ will go on, they'll open up HQ house in Nigeria, Ghana, and DRC, we help, yeah. But that bridge, it's really gratifying to see that being built and it allows people to come back and forth whether you're in the United States or Africa.

Seyi (25:54)
I can imagine.

yes, I'm sure you know well enough Nigerians won't let them not open one.

Preston Mendenhall (26:13)
Exactly.

Their arm is already being twisted. They're planning on it.

Seyi (26:16)
Exactly. This

is awesome, Preston. Thank you so much. And to our listeners, I hope you've learned a lot more about Tata City and about cities generally, because that's the point. And as always, we encourage you to reach out. You know our futurefor.fm. can email us. can share any questions you have.

And if you have questions for Preston, we'll make sure he gets them as well. His team have been fantastic just all around as I've been back and forth in touch with them. So thanks again and bye for now, everyone. Thanks so much, Preston.

Preston Mendenhall (26:54)
Seyi, thank you. See you soon.

Seyi (26:56)
See you soon.