Tbilisi auctions ten Tskaltubo spas with $24 million repair mandate

The Georgian government has listed ten Soviet-era sanatoriums in Tskaltubo for sale, requiring bidders to commit substantial funds beyond the purchase price to complete renovations. The state listed the properties on October 20, and the online auction closes on November 15.

The most prominent asset in the sale is the Medea sanatorium, which carries a base price of $3.3 million. The winning bidder must also pledge an additional $24 million toward a five-year renovation project. This work must result in at least 120 guest rooms, conference halls, and restaurants. The remaining nine properties have starting prices between $1 million and $3.5 million, with similar requirements for private investment in repairs.

Frederic Le Fichoux, a commercial real estate expert who assisted with a 2020 feasibility study for the town, argues that these terms address a structural gap in the destination. He notes that restoring a single building does not fix the neglect of the wider infrastructure. Le Fichoux stated, "If you are one investor and you buy, you renovate that property that you bought, you turn it around, but then the rest of the destination is still kept as a ruin." He believes the town needs public funding for roads and access to support private reinvestment.

The state has attempted to sell these assets before with mixed results. Seven sanatoriums were sold in earlier auctions, but three have since returned to state ownership. Medea was one of the properties taken back in 2024 after its buyer failed to meet contractual obligations. David Sichinava, a Canada-based academic, described the redevelopment approach as "all or nothing." He pointed to a legal exemption that allows casino operators in Tskaltubo to skip permit fees, which cost up to $1.9 million annually elsewhere in Georgia. Sichinava said, "Balneology (the science of therapeutic use of baths) alone can't really support the kind of tourists that this town can host."

Public interest in the town peaked in October 2019 when Bidzina Ivanishvili, founder of the ruling Georgian Dream party, promised to buy the state-owned spas. He called their condition "depressing" and pledged a "full-scale rehabilitation." Prime Minister Irakli Kobakhidze told media on October 20 that the plan was dropped due to the pandemic and "de facto sanctions" against Ivanishvili.

The buildings have also served as housing for people displaced by conflicts in Abkhazia and South Ossetia since the 1990s. Most residents have moved out, though Sichinava estimates 100 to 200 displaced people still live in the structures. Madonna Mushkudiani, who fled Abkhazia in 1992 and was relocated to an apartment in 2023, said she still visits former neighbors. She described the partly derelict building as their "second home."