Tskaltubo Auction: Buyers Face $27.3 Million Total Cost for Medea Spa

The Georgian government listed ten Soviet-era sanatoriums in the spa town of Tskaltubo for auction on October 20. The online bidding process ends on November 15. The properties require buyers to commit to substantial capital improvements beyond the initial purchase price.

The Medea sanatorium carries an asking price equivalent to $3.3 million. The successful bidder must also commit $24 million toward a five-year renovation. That work must produce at least 120 guest rooms, conference halls, and restaurants. The total financial obligation for Medea reaches $27.3 million. The other nine complexes in the auction have starting prices between $1 million and $3.5 million, with similar requirements for additional renovation spending.

Frederic Le Fichoux, a commercial real estate expert who contributed to a 2020 feasibility study for Tskaltubo, noted that the terms address a structural issue. He argued that renovating a single building may not succeed if the surrounding infrastructure remains neglected. "If you are one investor and you buy, you renovate that property that you bought, you turn it around," he said, "but then the rest of the destination is still kept as a ruin." He believes the town needs public funding for roads and access to support private reinvestment.

Previous sales have not guaranteed long-term success. Seven sanatoriums were sold in earlier auctions, but three have reverted to state ownership. Medea was taken back in 2024 after its buyer failed to meet contractual obligations. David Sichinava, a Canada-based academic who grew up in the town, described the redevelopment approach as all or nothing. He noted that Tskaltubo is exempt from permit fees for casinos, a cost that can reach $1.9 million annually in other parts of Georgia.

Bidzina Ivanishvili, the founder of the ruling Georgian Dream party, promised in October 2019 to buy the state-owned spas and rehabilitate them. He called their condition depressing. Prime Minister Irakli Kobakhidze stated on October 20 that the plan was abandoned due to the pandemic and de facto sanctions against Ivanishvili. The sanatoriums have also served as temporary housing for people displaced by the Abkhazia and South Ossetia conflicts. Sichinava estimates that 100 to 200 displaced residents still live in the buildings. Madonna Mushkudiani, who fled Abkhazia in 1992 and was relocated in 2023, said the buildings were their second home.