Georgia Auctions Ten Tskaltubo Spas With $27.3 Million Total Repair Bill

The Georgian government listed ten deteriorating Soviet-era sanatoriums in Tskaltubo for sale on October 20, attaching strict renovation requirements to the purchase. The online bidding process ends on November 15. The state seeks $3.3 million for the prominent Medea facility, but the winning bidder must also pledge $24 million for a five-year rebuild that includes at least 120 guest rooms, conference halls, and restaurants.

These terms apply to all ten properties. The other nine buildings carry starting prices between $1 million and $3.5 million, each with similar mandates for substantial investment in repairs. This structure follows a history of failed transactions. Seven sanatoriums were sold in previous auctions, but three have returned to state ownership. Medea itself was reclaimed in 2024 after its buyer failed to meet specific contractual obligations.

Frederic Le Fichoux, a commercial real estate expert who authored a 2020 feasibility study on the town, argues these conditions expose a structural flaw. He notes that fixing isolated buildings may not suffice 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," Le Fichoux said, "but then the rest of the destination is still kept as a ruin." He believes public funding for roads and access is necessary to support private reinvestment.

David Sichinava, a Canada-based academic with childhood ties to the site, describes the redevelopment strategy as an all-or-nothing proposition. He points to a specific legal exemption that allows casino operators in Tskaltubo to bypass permit fees that cost up to $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’s current status follows a broken promise from 2019. Bidzina Ivanishvili, Georgia's wealthiest man and founder of the ruling Georgian Dream party, pledged to buy and rehabilitate the state-owned spas. He described their condition as depressing at the time. Prime Minister Irakli Kobakhidze stated on October 20 that the pandemic and de facto sanctions against Ivanishvili caused the plan to collapse.

The buildings also have a social history. Since the 1990s, they housed displaced residents from the Abkhazia and South Ossetia conflicts. Most have moved out, though Sichinava estimates 100 to 200 displaced people still live in the structures. Madonna Mushkudiani, who fled Abkhazia in 1992, relocated to a town apartment in 2023. She recalled the poor conditions of the partly derelict building but still visits former neighbors. "We miss every minute we spent there. It was our second home," she said.