Tskaltubo Auction Requires $24 Million Spa Overhaul

The Georgian government listed ten dilapidated sanatoriums in Tskaltubo for auction on October 20. The online bidding process ends on November 15. Potential buyers face strict requirements to fund major renovations in addition to the purchase price.

The state is seeking 3.3 million dollars for the Medea sanatorium. A successful bidder must commit an additional 24 million dollars over five years. This investment must create at least 120 guest rooms, conference halls, and restaurants. Other properties in the auction start between 1 million and 3.5 million dollars and carry similar renovation mandates.

Frederic Le Fichoux, a commercial real estate expert who helped draft a 2020 feasibility study for the region, noted that renovating single buildings may not revitalize the town. He stated that if one investor repairs a property, the rest of the destination remains in ruins. He argued that public funds are needed to improve access roads to support private reinvestment.

Previous sales have faced setbacks. Seven sanatoriums were sold in earlier auctions, but three have returned to state ownership. Medea was reclaimed in 2024 after its buyer failed to meet contractual terms. David Sichinava, a Canada-based academic who grew up in Tskaltubo, described the redevelopment strategy as all or nothing.

Sichinava pointed out that Tskaltubo is exempt from casino permit fees that can cost 1.9 million dollars per year elsewhere in Georgia. He said therapeutic baths alone cannot support the tourist volume the town could host. In October 2019, Bidzina Ivanishvili, the founder of the ruling Georgian Dream party, pledged to buy and rehabilitate the spas but canceled the plan.

Prime Minister Irakli Kobakhidze told media on October 20 that the pandemic and de facto sanctions against Ivanishvili caused the delay. Since the 1990s, the buildings have housed people displaced by conflicts in Abkhazia and South Ossetia. Most residents have moved out, leaving an estimated 100 to 200 displaced persons in the structures.

Madonna Mushkudiani moved into a sanatorium in 1992 after fleeing Abkhazia. She relocated to an apartment in the town in 2023. She described the conditions in the partly derelict building as poor but said she still visits former neighbors. She stated that the community was a second home.