Medea spa sale carries $27.3 million price tag for Tskaltubo rebuild

Potential buyers of the Medea sanatorium in Tskaltubo face a total investment of $27.3 million. The government listed the property for sale on October 20, with the online auction closing on November 15. The bid includes a base price of $3.3 million plus a mandatory $24 million commitment for a five-year renovation.

The renovation plan requires the development of at least 120 guest rooms, conference halls, and restaurants. The other nine sanatoriums in the auction carry similar financial terms. Their starting prices range from $1 million to $3.5 million, and each buyer must pledge additional capital for repairs.

Frederic Le Fichoux, a commercial real estate expert who helped prepare a 2020 feasibility study for the town, noted that the conditions reflect infrastructure gaps. He argued that renovating a single building may not attract visitors to a wider destination that 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." He believes public funding for roads and access is necessary alongside private reinvestment.

The state has a mixed history with these assets. Seven sanatoriums were sold in previous auctions, but three have returned to state ownership. Medea was taken back in 2024 after its buyer failed to meet contractual obligations. David Sichinava, a Canada-based academic, described the redevelopment strategy as an "all or nothing" approach. He noted that Tskaltubo is exempt from casino permit fees, which can cost up to $1.9 million annually in other parts of the country. "Balneology (the science of therapeutic use of baths) alone can't really support the kind of tourists that this town can host," he said.

Bidzina Ivanishvili, founder of the ruling Georgian Dream party, had pledged to buy the spas in October 2019. He called their condition "depressing" and promised a "full-scale rehabilitation." Prime Minister Irakli Kobakhidze stated 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, with Sichinava estimating only 100 to 200 remain. Madonna Mushkudiani, who moved into one building after fleeing Abkhazia in 1992, was relocated in 2023. She visited former neighbors and recalled the building as a second home. "We miss every minute we spent there," she said.