Gridgrad was a small village on Sergyar that was destined to become the new planetary capital, taking the job from Kareenburg. The village had a near-equatorial location on the planet, and was about 1/10th of way around the planet from it, on a different continent. The land there was well-watered and geologically stable, particularly compared to Kareenburg, which was sited next to a live volcano.
The plan was to create a military base first, then move the planetary capital there. A young city architect was brought in to plan out the city, and Ekaterin Vorkosigan was brought on to set up parks and gardens within it. She ended up designing six municipal gardens and the Viceregal Palace grounds for the city.
The moving project suffered from a severe lack of infrastructure at Gridgrad and a severe lack of support from the Kareenburg populace, who wanted to keep the capital there. The Vicereign, Cordelia Vorkosigan, sought to attract entrepreneurs who would be willing to set up materials plants. At first the only taker was a company named Plas-Dan; they made so many expensive demands for the right to do so that Cordelia was not favorable to hiring them. So she went shopping for alternatives....She contacted relatives and friends on Barrayar and Komarr, with offers of land at very low cost. Her son Mark Vorkosigan pointed out that the shortage of streets, buildings, utilities, and workforces made the offer not that interesting.
A building boom began at Gridgrad, getting the military base built, but it suffered difficulties and delays due to the shortage of materials plants and other infrastructure. Despite this, by the day after Jole's birthday party, they were up to three shuttle flights per day of people travelling between Gridgrad and Kareenburg. Soon afterwards, the main difficulties were fixed by her son Mark and Kareen Koudelka, who arrived with an Escobaran company that was willing to drop a pre-fab factory from orbit. Cordelia added a young Cetagandan ghem with plumbing-company-running skills, and the city was ready to grow.
The Viceregal palace was sited in the city center of West Gridgrad, which a year-and-a-half later was looking like a war zone instead of a beautiful city, due to the extensive number of building projects coming along and to the just-skeleton-so-far nature of the gardens.