Menelik and his consort meanwhile were being attracted southwards by the hot-springs of Felwaha where they often spent many days, accompanied by their entire court, and soon decided on making this area of lower elevation their capital.

By this time Menelik was also interested in southward expansion as well as the need to improve his communications with the Gulf of Aden while he increased supply of firearms rendered it less important to be situated on a mountain fortress. The houses at Entoto, though well constructed, were cold, and at the end of the rainy season of 1886, Menelik and Taytu, accompanied by their retinue, went down for the second time to Felwaha where a large number of tents were erected. Taytu, admiring the beauty of the scenery from the door of her tent and remarking on the softness of the climate, asked Menelik to give her land on which to build a house and, not long after wards, a beautiful edifice was erected. In the following year, 1887, Taytu once more left Entoto and settled in her new house above the hot springs and then began the building of the town. All the chiefs were offered land around the royal area, and began individually to build their own dwellings. The army loved staying there and Taytu was so struck, it is said, by the beauty of the flowering Mimosa trees in the area that she ordered that the town should be given the name of Addis Ababa (“new flower” in Amharic).

It seems that Menelik and his court made several visits to Felwaha, returning his palace at Entoto after each one, but gradually Felwaha gained favor with him and by 1889 a building program of ‘magnificent works’ began at the new Addis Ababa, among them a house ‘worthy of administration for the government’.
Two years later, in April1891, work began on the Sellasie Church, which was finished in July. It was in that year that the first stone house was built and the Emperor made the main distribution of land for the new town, the recipients including a small number of Europeans to whom he promised that Addis Ababa would not be abandoned in favor of Entoto or any other place.

Menelik was meanwhile taking steps to improve the capital’s supply position. In January 1891. he established hereditary ownership of land in rural areas outside the capital, thereby increasing agricultural incentives, while in the following year he imposed a tithe on the agricultural production of Shoa for the express purpose of feeding the soldiers, who were henceforth prohibited from foraging for themselves. Both acts were a great encouragement to the farmers upon whom the development of the capital depended.