Georgia auctions Tskaltubo spas with $24 million repair mandate

Potential buyers for a dilapidated Soviet-era spa complex in Tskaltubo, Georgia, must commit to spending $27.3 million in total to take ownership. The government listed ten abandoned sanatoriums for sale on October 20, and the online auction closes on November 15. The most expensive lot is the Medea sanatorium, which carries a base price of $3.3 million. That figure excludes a mandatory $24 million renovation budget that the winner must commit to over five years.

The renovation plan for Medea requires the construction of at least 120 guest rooms, conference halls, and restaurants. The other nine sanatoriums in the auction carry similar financial strings. Their starting prices range from $1 million to $3.5 million, with additional pledges required for repairs and upgrades. Tskaltubo gained fame during the Soviet period for its mildly radioactive mineral water baths, which attracted visitors on direct trains from Moscow.

Frederic Le Fichoux, a commercial real estate expert who helped prepare a 2020 feasibility study on the town, warned that buying a single building may not fix the area’s wider infrastructure problems. "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 argued that public money for roads and access is necessary to support private investment in the hotels.

The state has struggled to keep the properties in private hands. Seven sanatoriums were sold in previous auctions, but three have returned to state ownership. Medea was one of those properties, taken back 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 noted that Georgian law exempts Tskaltubo from casino permit fees, which can reach $1.9 million annually in other parts of the country.

The current auction follows a failed private acquisition attempt. In October 2019, Bidzina Ivanishvili, the founder of the ruling Georgian Dream party, promised to buy the spas and fund a full rehabilitation. Prime Minister Irakli Kobakhidze stated on October 20 that the pandemic and "de facto sanctions" against Ivanishvili caused the plan to be dropped.

The buildings have also served as temporary housing for people displaced by conflicts in Abkhazia and South Ossetia since the 1990s. Most residents have moved out, but Sichinava estimates that 100 to 200 displaced people still live in the structures. Madonna Mushkudiani moved into one of the buildings after fleeing Abkhazia in 1992 and was relocated to an apartment in 2023. She said the conditions in the partly derelict building were poor, but she still visits her former neighbors there.