Tskaltubo Spas Face High Stakes

The Georgian government has listed ten dilapidated Soviet-era sanatoriums in Tskaltubo for public sale.

The state set a minimum bid of $3.3 million for the most prominent property, the Medea sanatorium. Bidders must also pledge an additional $24 million to complete a five-year renovation project. That work must yield at least 120 guest rooms, conference halls, and restaurants. The other nine properties in the auction carry similar conditions, with starting prices ranging from $1 million to $3.5 million and mandatory renovation commitments. The online auction closes on November 15.

Frederic Le Fichoux, a commercial real estate expert who contributed to a 2020 feasibility study on the area, argues that the high renovation requirements expose a structural weakness. He notes that restoring individual buildings often fails to attract visitors when 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." He asserts that public funding for roads and access is necessary to support private investment in the buildings.

Previous attempts to privatize these assets have faced challenges. Seven sanatoriums were sold in earlier auctions, but three have since reverted to state ownership. The Medea sanatorium 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, describes the town's redevelopment as an "all or nothing" proposition. He points out that Tskaltubo is exempt from casino permit fees that can cost up to $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.

The town has received political attention in recent years. In October 2019, Bidzina Ivanishvili, founder of the ruling Georgian Dream party, promised to purchase the state-owned spas and undertake a "full-scale rehabilitation." He described the condition of the buildings as "depressing." Prime Minister Irakli Kobakhidze stated on October 20 that the plan was dropped due to the pandemic and "de facto sanctions" against Ivanishvili. Since the 1990s, the sanatoriums have also housed displaced people from the Abkhazia and South Ossetia conflicts. Most residents have moved out, with Sichinava estimating that only 100 to 200 displaced individuals remain in the buildings. Madonna Mushkudiani, who fled Abkhazia in 1992 and was relocated in 2023, said she still visits former neighbors. "We miss every minute we spent there. It was our second home," she said.