Tskaltubo Auctions Demand $24 Million Medea Renovation

The Georgian government has listed ten deteriorating Soviet-era sanatoriums in Tskaltubo for public sale, closing the online auction on November 15.

The state is seeking a starting price of $3.3 million for the flagship Medea facility. Any successful bidder must also commit $24 million to a five-year renovation plan that includes building at least 120 guest rooms, conference halls, and restaurants. The remaining nine properties carry similar terms, with entry bids ranging from $1 million to $3.5 million and mandatory renovation pledges that exceed the purchase price.

Frederic Le Fichoux, a commercial real estate expert who contributed to a 2020 feasibility study on the town, warned that individual building restorations may not generate enough traffic for the wider destination. He noted that the surrounding infrastructure remains neglected. "If you are one investor and you buy, you renovate that property that you bought, you turn it around," Le Fichoux said, "but then the rest of the destination is still kept as a ruin." He argued that public investment in roads and access is necessary to support private reinvestment.

The state has attempted to sell these properties before with mixed results. Seven sanatoriums were sold in previous auctions, but three have since reverted to state ownership. Medea was reclaimed in 2024 after its previous buyer failed to meet specific contractual obligations. David Sichinava, a Canada-based academic who grew up in Tskaltubo, described the redevelopment approach as all or nothing. He expressed concern that the town relies too heavily on balneology, noting that Georgian law exempts Tskaltubo from casino permit fees that can reach $1.9 million annually in other regions.

The current auction follows a 2019 pledge by Bidzina Ivanishvili, founder of the ruling Georgian Dream party, to purchase the state-owned spas. He called their condition depressing and promised a full-scale rehabilitation. Prime Minister Irakli Kobakhidze stated on October 20 that the plan was abandoned due to the pandemic and de facto sanctions against Ivanishvili.

Since the 1990s, the sanatoriums have housed people displaced by the conflicts in Abkhazia and South Ossetia. Most residents have moved out, though Sichinava estimates 100 to 200 displaced people still live in the buildings. Madonna Mushkudiani, who fled Abkhazia in 1992 and was relocated in 2023, described the buildings as her second home despite their poor condition.