Bidding on Tskaltubo Spas Triggers $24 Million Repair Mandate

The Georgian government listed ten dilapidated Soviet-era sanatoriums in Tskaltubo for public sale on October 20, with an auction deadline set for November 15.

The most prominent property is the Medea sanatorium, which carries a starting bid of $3.3 million. However, the winner must commit an additional $24 million to a five-year renovation project. This investment is required to deliver at least 120 guest rooms, conference halls, and restaurants.

The other nine sanatoriums in the auction carry similar financial burdens. Their initial prices range from $1 million to $3.5 million, with mandatory pledges for substantial renovation investments. These terms aim to force the physical restoration of the buildings, which have deteriorated since the Soviet collapse.

Frederic Le Fichoux, a commercial real estate expert who conducted a 2020 feasibility study on the town, argues that single-building renovations may not be enough to attract visitors. He noted that the wider infrastructure and attractions in Tskaltubo have been 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."

Previous attempts to privatize the assets have faced difficulties. Seven sanatoriums were sold in earlier auctions, but three have returned to state ownership. The Medea sanatorium was one of these, taken back by the state in 2024 after its buyer failed to meet contractual obligations. David Sichinava, a Canada-based academic who grew up in the town, described the redevelopment strategy as an "all or nothing" approach. He pointed out that Tskaltubo is exempt from casino permit fees, which can cost up to $1.9 million annually elsewhere in Georgia.

The town gained national attention in October 2019 when Bidzina Ivanishvili, founder of the ruling Georgian Dream party, pledged to buy the properties and undertake a "full-scale rehabilitation." Prime Minister Irakli Kobakhidze stated on October 20 that the plan was abandoned due to the pandemic and sanctions against Ivanishvili. Since the 1990s, the buildings have also housed residents displaced by the wars in Abkhazia and South Ossetia. Sichinava estimates that between 100 and 200 displaced people still live in the structures, though many have relocated to apartments in the town.