A rendering of the Gateway Pavilion at St. Elizabeths. (Davis Brody Bond)

The transformation of the St. Elizabeths east campus officially got underway this morning when District officials broke ground on the Gateway Pavilion, the first structure in what city leaders envision as an overhaul of the historic hospital into a hub of government and business activity. The pavilion, which covers two acres of the sprawling complex, is scheduled to be completed by Aug. 31.

Mayor Vince Gray, Deputy Mayor for Planning and Economic Development Victor Hoskins, Councilmember Marion Barry (D-Ward 8), and other D.C. officials who spoke at this morning’s ceremony say the pavilion will attract food vendors, open-air markets, educational events, and meetings. But a lot of that will depend at first on the U.S. Coast Guard, which is beginning to move its personnel into St. Elizabeths west side. On the side of the hospital that D.C. is developing, the long-term vision includes Microsoft and other technology firms planting down office space once the campus’ 150-year-old buildings are renovated, a process that is expected to last until at least 2016. Between the 2013 and 2016 fiscal years, the District plans to spend $113 million upgrading—and in large part entirely replacing—the electric, water, and roadway infrastructure at St. Elizabeths.

For now, though, Gray, Barry, and the others promoted the Gateway Pavilion as an anchor for the Congress Heights neighborhood.

“It’s a huge part of our economic development plan,” Gray said at the groundbreaking ceremony. The Gateway Pavilion, designed by the architecture firm Davis Brody Bond and being constructed by a gaggle of contractors, is a $5 million project. The winning design, unveiled last October, features terraced lawns, sloping paths and space for food trucks and kiosks to set up shop.

“This structure and its build-outs will provide the amenities the community needs and, frankly, deserves,” Hoskins said in a news release.

But those kiosks, fast-casual restaurants, and other businesses will first need to be convinced to set up shop in a neighborhood that is still largely residential and commercially underdeveloped. To that end, Gray made a rather attractive rental offer. Vendors that move into the Gateway Pavilion will be charged initial rents of $1, the mayor said. But that’s a limited time offer, he said.

“If you want to be here after a certain point we want you to pay up,” Gray said.