Medea Sanatorium Auction Requires $27.3 Million Total Investment

A buyer of the Medea sanatorium in Tskaltubo, Georgia, must commit a total of $27.3 million to the property. This sum combines a state asking price of $3.3 million with a mandatory $24 million renovation budget. The government listed the ten Soviet-era properties for sale on October 20. The online auction closes on November 15.

The renovation mandate for Medea requires the completion of a five-year project. This project must deliver at least 120 guest rooms, conference halls, and restaurants. The other nine sanatoriums in the auction carry similar financial obligations. Their initial listing prices range from $1 million to $3.5 million, but buyers must pledge to invest substantially more in repairs.

Frederic Le Fichoux, a commercial real estate expert who helped prepare a 2020 feasibility study for the town, noted that single building restorations may not fix the destination's infrastructure. "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 argues that public funds are needed for roads and access to support private reinvestment.

The state has struggled to retain private buyers for these assets. Seven sanatoriums were sold in previous auctions, but three have since returned to state ownership. Medea was taken back in 2024 after its buyer failed to meet contractual obligations. The town's history includes a 2019 pledge by billionaire Bidzina Ivanishvili to buy the state-owned spas. Prime Minister Irakli Kobakhidze stated on October 20 that the pandemic and de facto sanctions against Ivanishvili caused that plan to be dropped.

David Sichinava, a Canada-based academic who grew up in Tskaltubo, described the redevelopment strategy as an "all or nothing" approach. He highlighted that the town is exempt from casino permit fees that can reach $1.9 million a year elsewhere in the country. "Balneology (the science of therapeutic use of baths) alone can't really support the kind of tourists that this town can host," Sichinava said.

Since the 1990s, the sanatoriums have housed people displaced by conflicts in Abkhazia and South Ossetia. Most have moved out, with Sichinava estimating that only 100 to 200 displaced people still live in the buildings. Madonna Mushkudiani, who moved into one building after fleeing Abkhazia in 1992, was relocated to an apartment in 2023. "We miss every minute we spent there. It was our second home," she said.