Georgia Auctions Tskaltubo Sanatoriums With $27.3M Total Bill for Medea

Georgia’s government has listed ten dilapidated Soviet-era sanatoriums in Tskaltubo for sale, creating a high-stakes bidding war where the entry fee is only the beginning of the cost. The online auction opens now and closes on November 15, with the state demanding that buyers commit to extensive repairs immediately after purchase.

The centerpiece of the sale is the Medea sanatorium, a neoclassical building that has become an icon of the region. Tbilisi has set the starting price for Medea at the equivalent of $3.3 million. However, the buyer must also pledge $24 million for a five-year renovation project. This investment must result in at least 120 guest rooms, plus conference halls and restaurants. The other nine properties in the auction have starting prices ranging from $1 million to $3.5 million, with similar mandatory renovation pledges attached to each.

Frederic Le Fichoux, a commercial real estate expert who authored a 2020 feasibility study on the town, warned that buying one building may not be enough to save the destination. He argued that 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 emphasized that public funding for roads and access is necessary alongside private capital.

The state has attempted to sell these assets before with mixed results. Seven sanatoriums were sold in previous auctions, but three have already returned to government ownership. Medea itself was taken back in 2024 after its previous buyer failed to meet contractual obligations. This history of failed sales adds pressure on the current bidders to deliver on their promises.

David Sichinava, a Canada-based academic who grew up in Tskaltubo, described the redevelopment strategy as all or nothing. He noted that the town is exempt from casino permit fees, a perk that can cost operators up to $1.9 million annually elsewhere in Georgia. Sichinava argued that therapeutic baths alone cannot support the volume of tourists the town could host without diversifying its attractions.

The town’s troubled history dates back to 2019, when Bidzina Ivanishvili, the founder of the ruling Georgian Dream party, pledged to buy the spas and launch a full-scale rehabilitation. That plan stalled due to the pandemic and sanctions against Ivanishvili, according to Prime Minister Irakli Kobakhidze. Since the 1990s, the buildings also housed people displaced by wars in Abkhazia and South Ossetia. Most have since moved out, leaving an estimated 100 to 200 residents behind.

Madonna Mushkudiani, who fled Abkhazia in 1992 and lived in one of the buildings until 2023, remembered the community fondly despite poor conditions. She was relocated to an apartment in the town but still visits her former neighbors. "We miss every minute we spent there. It was our second home," she said.