Medea Spa Buyer Faces $27.3 Million Total Cost After Tskaltubo Auction Opens

Tskaltubo, a spa town in Georgia known for its warm mineral waters, has entered a new phase of commercial redevelopment. On October 20, the government listed ten Soviet-era sanatoriums for online auction, a process scheduled to close on November 15. The properties, once central to the town's identity, now require buyers to assume substantial financial responsibilities beyond the initial bid.

The most prominent asset in the sale is the Medea sanatorium, a neoclassical building frequently featured in international media. Tbilisi has set the entry price at the equivalent of $3.3 million. However, the purchase includes a mandatory five-year renovation plan valued at $24 million. This total commitment of $27.3 million must fund the construction of at least 120 guest rooms, conference halls, and dining facilities.

The other nine properties in the auction carry similar conditions. Their initial prices range from $1 million to $3.5 million, with buyers agreeing to invest further sums for restoration. Frederic Le Fichoux, a commercial real estate expert who contributed to a 2020 feasibility study for the town, noted that these terms address a specific challenge. He argued that renovating a single building may not be enough to attract visitors 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," Le Fichoux said, "but then the rest of the destination is still kept as a ruin."

The state has attempted to sell these assets before with mixed results. Seven sanatoriums were sold in previous auctions, but three have since reverted to state ownership. Medea was one of the properties returned to the government in 2024 after its buyer failed to meet contractual obligations. David Sichinava, a Canada-based academic who grew up in Tskaltubo, described the town's redevelopment as an "all or nothing" endeavor. He highlighted a specific legal advantage for potential investors, noting that the town is exempt from permit fees for casino operators, a cost that can reach $1.9 million annually in other parts of Georgia.

The town's recent history includes a high-profile pledge that did not come to fruition. In October 2019, Bidzina Ivanishvili, Georgia's wealthiest man and founder of the ruling Georgian Dream party, promised to purchase the state-owned spas. He described their condition as "depressing" and pledged a "full-scale rehabilitation." Prime Minister Irakli Kobakhidze stated on October 20 that the plan was abandoned due to the pandemic and what he termed "de facto sanctions" against Ivanishvili.

The sanatoriums have served as temporary housing for people displaced by conflicts in Abkhazia and South Ossetia since the 1990s. Most residents have since moved out, with Sichinava estimating that only 100 to 200 displaced individuals remain in the buildings. Madonna Mushkudiani, who fled Abkhazia in 1992 and lived in one of the structures until being relocated in 2023, described the buildings as a "second home." She said the group of former neighbors still visits, noting, "We miss every minute we spent there."