Tbilisi Auctions Tskaltubo Spas With $24 Million Repair Mandate

The Georgian government closed its listing of ten dilapidated Soviet-era sanatoriums in Tskaltubo on October 20, setting a deadline of November 15 for the online auction. The state is asking for the equivalent of $3.3 million for the Medea complex, the most recognizable property in the group. Bidders must also commit $24 million to a five-year renovation plan that guarantees at least 120 guest rooms, conference halls, and restaurants.

The other nine properties in the auction carry similar financial conditions. Initial prices for these buildings range from $1 million to $3.5 million, with each buyer obligated to invest additional capital in repairs. The government aims to shift the maintenance burden from the public sector to private investors, a strategy that has mixed results in the town’s history.

Frederic Le Fichoux, a commercial real estate expert who authored a 2020 feasibility study for Tskaltubo, argues that the terms reflect a structural gap in the town’s appeal. He notes that renovating a single building does not fix the wider infrastructure that has been neglected for decades. "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 believes public funds are necessary to improve access roads and other utilities to support private development.

The state has attempted to sell these assets before, with inconsistent success. Seven sanatoriums were sold in previous auctions, but three have since reverted to state ownership. Medea was taken back in 2024 after its purchaser failed to meet specific contractual obligations. This history of reversion raises questions about the long-term viability of the current auction terms.

David Sichinava, a Canada-based academic who grew up in Tskaltubo, describes the town’s redevelopment as an "all or nothing" proposition. He points to a specific legal exemption that allows casino operators in Tskaltubo to avoid permit fees that can reach $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," Sichinava said, suggesting that diversified tourism is essential for the area’s survival.

The sanatoriums have a complex social history, having housed residents displaced by conflicts in Abkhazia and South Ossetia since the 1990s. Most displaced families have moved out, though Sichinava estimates 100 to 200 residents still live in the buildings. Madonna Mushkudiani, who fled Abkhazia in 1992 and was relocated to an apartment in 2023, remembers the properties as a community hub. "We miss every minute we spent there. It was our second home," she said.

The auction follows a 2019 pledge by Bidzina Ivanishvili, Georgia’s wealthiest man, to buy and rehabilitate the state-owned spas. Prime Minister Irakli Kobakhidze stated on October 20 that the plan was dropped due to the pandemic and "de facto sanctions" against Ivanishvili. The current auction represents the state’s first major move to sell the assets since that promise was withdrawn.