Georgia auctions Medea spa with $24 million renovation mandate

The Georgian government requires buyers of the Medea sanatorium to invest $24 million in renovations over five years, adding to a $3.3 million purchase price. This brings the total financial commitment for the property to $27.3 million. The auction for Medea and nine other Soviet-era sanatoriums in Tskaltubo closes on November 15.

The state listed the properties on October 20. The renovation plan for Medea must result in at least 120 guest rooms, conference halls, and restaurants. The other nine buildings in the auction carry similar terms. Their initial prices range from $1 million to $3.5 million, with buyers also pledging substantial funds for repairs.

Tskaltubo served as a major resort destination during the Soviet era, attracting visitors with trains from Moscow and baths using warm mineral water. The Medea building is particularly well known for its neoclassical architecture. The town's infrastructure has declined since the collapse of the Soviet Union.

Frederic Le Fichoux, a commercial real estate expert who helped prepare a 2020 feasibility study for the area, warned that private investment in single buildings may not be enough. He noted that the wider destination remains in poor condition. "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 funding for roads and access is necessary alongside private reinvestment.

The state has previously attempted to sell these properties. Seven sanatoriums changed hands in earlier auctions, but three have returned to government control. Medea was taken back in 2024 after its previous buyer failed to meet contractual obligations. Prime Minister Irakli Kobakhidze stated on October 20 that an earlier plan by Bidzina Ivanishvili to buy the spas was dropped due to the pandemic and sanctions.

David Sichinava, a Canada-based academic, described the town's redevelopment strategy as "all or nothing." He noted that Tskaltubo is exempt from casino permit fees, which can cost $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 buildings also house displaced people from Abkhazia and South Ossetia, though most have moved out.

Madonna Mushkudiani, who fled Abkhazia in 1992, lived in one of the sanatoriums until being relocated to an apartment in 2023. She described the living conditions in the partly derelict building as poor but maintained that the site served as a second home for many residents. "We miss every minute we spent there," she said. Sichinava estimates that 100 to 200 displaced people still live in the buildings.