Buyers Face $27.3 Million Total Cost For Tskaltubo Medea Spa

Georgia has opened an online auction for ten dilapidated Soviet-era sanatoriums in the Tskaltubo spa town. The government listed the assets on October 20, and the bidding process concludes on November 15. For the flagship Medea property, the total financial commitment for a successful bidder reaches the equivalent of $27.3 million.

The state is seeking an initial bid of $3.3 million for the Medea sanatorium. Beyond that purchase price, the winner must contractually commit $24 million toward a five-year restoration plan. This renovation must result in at least 120 guest rooms, plus conference halls and dining facilities. The other nine properties in the auction carry similar structures, with starting prices ranging from $1 million to $3.5 million and additional mandatory investment pledges.

Frederic Le Fichoux, a commercial real estate expert who contributed to a 2020 feasibility study on the town, noted that the high renovation thresholds reflect a wider infrastructure gap. He argued that restoring a single building does not fix the neglect of the surrounding destination. "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 believes public funding is required to improve access roads before private capital can drive development.

The current auction follows previous attempts to sell these assets. Seven sanatoriums changed hands in earlier sales, but three have since reverted to state ownership. Medea was among those taken back in 2024 after its previous buyer failed to meet specific contractual terms. David Sichinava, a Canada-based academic who grew up in Tskaltubo, described the redevelopment strategy as an "all or nothing" approach. He noted that the town is exempt from casino permit fees that can cost up to $1.9 million annually in other parts of the country. "Balneology (the science of therapeutic use of baths) alone can't really support the kind of tourists that this town can host," he said.

The complex gained national attention in October 2019 when Bidzina Ivanishvili, Georgia's wealthiest man and founder of the ruling Georgian Dream party, pledged to buy and rehabilitate the sites. He called the condition of the buildings "depressing." Prime Minister Irakli Kobakhidze stated on October 20 that the plan was abandoned due to the pandemic and what he termed "de facto sanctions" against Ivanishvili.

The sanatoriums have also served as temporary housing for people displaced by conflicts in Abkhazia and South Ossetia since the 1990s. Most residents have moved out, though Sichinava estimates 100 to 200 displaced people remain. Madonna Mushkudiani, who fled Abkhazia in 1992 and lived in one of the buildings until 2023, said she still visits former neighbors. "We miss every minute we spent there. It was our second home," she said.