Tskaltubo Spa Sale Sets $27.3 Million Total Obligation

The spa town of Tskaltubo once attracted Soviet tourists via direct trains from Moscow, but its facilities have fallen into disrepair. On October 20, the Georgian government listed ten of these run-down sanatoriums for sale, with an online auction scheduled to close on November 15.

The most prominent property is the Medea sanatorium, known for its neoclassical arches. Tbilisi is asking for the equivalent of $3.3 million for this building alone. However, the buyer must also commit $24 million to a five-year renovation plan. That investment is required to create at least 120 guest rooms, along with conference halls and restaurants.

The other nine properties carry similar financial burdens. Initial asking prices range from $1 million to $3.5 million. Bidders must pledge to invest considerably more in restoring these structures. The total obligation for the entire portfolio reaches the equivalent of $27.3 million when initial prices and renovation pledges are combined.

Frederic Le Fichoux, a commercial real estate expert who helped prepare a 2020 feasibility study for the town, questions the strategy. He argues that fixing single buildings may not save a destination where wider infrastructure is 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 the town has commercial potential but requires public money for better roads and access alongside private reinvestment. The state has attempted this sale before. Seven sanatoriums were sold in earlier auctions, but three have since returned to state ownership. Medea was taken back in 2024 after its buyer failed to meet contractual obligations.

David Sichinava, a Canada-based academic who grew up in the area, described the redevelopment approach as "all or nothing." He noted that Tskaltubo is exempt from permit fees for casino operators, a benefit that can reach $1.9 million a year 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," he said.

The town gained attention in October 2019 when Bidzina Ivanishvili, Georgia's wealthiest man, promised to buy and rehabilitate the spas. Prime Minister Irakli Kobakhidze stated on October 20 that this plan was dropped due to the pandemic and "de facto sanctions" against Ivanishvili. Since the 1990s, the buildings have also housed people displaced by conflicts in Abkhazia and South Ossetia. Sichinava estimates only 100 to 200 displaced people still live in the buildings.