Georgia Auctions Ten Tskaltubo Sanatoriums With $3.3M Medea Floor Price

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

The state is seeking a floor price of $3.3 million for the most famous property, the Medea sanatorium. This building features neoclassical arches that have become a recognizable image in Western media. During the Soviet period, Tskaltubo attracted visitors from Moscow who came for baths using warm, mildly radioactive mineral water.

The auction terms require buyers to invest substantially beyond the purchase price. The purchaser of the Medea facility must commit to a $24 million renovation over five years. This work must include the construction of at least 120 guest rooms, conference halls, and restaurants. The other nine properties in the auction carry similar mandates, with starting bids ranging from $1 million to $3.5 million.

Frederic Le Fichoux, a commercial real estate expert who contributed to a 2020 feasibility study for the town, noted that these conditions address a structural issue. He argued that fixing individual buildings may not be enough to attract tourists 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," he said, "but then the rest of the destination is still kept as a ruin." Le Fichoux believes the town has commercial potential but requires public funding for improved road access alongside private investment.

Previous state efforts to sell these assets have faced challenges. Seven sanatoriums were sold in earlier auctions, but three have since reverted to state ownership. The Medea was returned to the government in 2024 after its buyer failed to meet specific contractual obligations.

David Sichinava, a Canada-based academic who grew up in the area, described the redevelopment strategy as an "all or nothing" approach. He noted that Tskaltubo is exempt from casino permit fees that can 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," he said. The town previously housed displaced people from the conflicts in Abkhazia and South Ossetia. Most have moved out, and Sichinava estimates that only 100 to 200 displaced residents remain in the buildings.

In October 2019, Bidzina Ivanishvili, founder of the ruling Georgian Dream party, promised to buy the state-owned spas, calling their condition "depressing." He pledged a "full-scale rehabilitation," but the plan never materialized. Prime Minister Irakli Kobakhidze stated on October 20 that the project was dropped due to the pandemic and "de facto sanctions" against Ivanishvili. Madonna Mushkudiani, who fled Abkhazia in 1992 and lived in one of the buildings until 2023, said, "We miss every minute we spent there. It was our second home."