Georgia Auctions Ten Tskaltubo Sanatoriums With $24 Million Medea Renovation Mandate

Georgia has listed ten dilapidated Soviet-era sanatoriums in the spa town of Tskaltubo for public sale, with the online auction closing on November 15.

The government set the starting price for the Medea sanatorium, the complex’s most recognizable building, at $3.3 million. A buyer must also pledge an additional $24 million for a five-year renovation. That investment must result in at least 120 guest rooms, conference halls, and restaurants. The other nine properties have opening bids ranging from $1 million to $3.5 million, with similar renovation pledges required.

Frederic Le Fichoux, a commercial real estate expert who contributed to a 2020 feasibility study for Tskaltubo, noted that restoring single buildings may not be enough. He argued that the town’s wider 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 stated that public funding for roads and access is needed alongside private investment.

The state has a history of failed sales. Seven sanatoriums were sold in previous auctions, but three have reverted to state ownership. Medea was taken back in 2024 after its previous buyer failed to meet contractual obligations.

David Sichinava, a Canada-based academic who grew up in the town, described the redevelopment strategy as "all or nothing." He pointed to a specific legal exemption that allows Tskaltubo casino operators to skip permit fees that can reach $1.9 million annually elsewhere in Georgia. "Balneology (the science of therapeutic use of baths) alone can't really support the kind of tourists that this town can host," Sichinava said.

The town drew national attention in October 2019 when Bidzina Ivanishvili, founder of the ruling Georgian Dream party, promised to purchase the state-owned spas. He called their condition "depressing" and pledged a "full-scale rehabilitation." Prime Minister Irakli Kobakhidze stated on October 20 that the plan was dropped due to the pandemic and "de facto sanctions" against Ivanishvili.

Since the 1990s, the buildings have housed people displaced by conflicts in Abkhazia and South Ossetia. Sichinava estimates that only 100 to 200 displaced residents remain in the structures. Madonna Mushkudiani, who moved into a sanatorium after fleeing Abkhazia in 1992, was relocated to an apartment in 2023. She said she still visits former neighbors. "We miss every minute we spent there. It was our second home," Mushkudiani said.