Early this summer, I found myself in Abastumani once more, drawn back for personal reasons. For 10 days, I lived near the grand palace of Georgian oligarch Bidzina Ivanishvili. During my stay, I had the opportunity to observe the local people closely, noting their behaviors, moods, fears, hopes and expectations. It became evident that this small resort town is now a microcosm of the entire country.
Ivanishvili was elected prime minister and served for one year before resigning in 2013 and assuming his current role as the informal but powerful leader of the country. The billionaire’s fascination with the mountainous spa town of Abastumani piqued my interest two years ago.
While reviewing information from the National Agency of State Property, I stumbled upon several familiar companies linked to Ivanishvili that I recognized from the notorious Panama Papers. It turned out that since 2018, these companies had been purchasing vast tracts of land in Abastumani from the government at prices well below market value.
I first visited Abastumani in the spring of 2022 and began reporting for this article. Now I must tell you about this small, beautiful resort that became the oligarch’s property, was rebuilt according to his desires, and where many Georgian stories intersect.
Abastumani, nestled in the pine forest of southern Georgia, became famous for its fresh air at the end of the 19th century. Russian Emperor Alexander III built a palace and marble baths for his son George Romanov, who had a severe lung disease and moved to Abastumani.
Two centuries later, next to the Romanov palace, a new mystical palace appeared, built in such a way that it could not be seen by strangers. The palace is not visible from any side. From the front gate, only well-kept lawns and walking paths are visible.
The palace is surrounded by an artificial cliff. Even the gate is embedded in this cliff so that no one can see it at first glance. During my stay in Abastumani, I saw this cliff open only twice when Ivanishvili’s black cars entered.
Even locals have never seen the palace itself. Ivanishvili mostly moves by helicopter, and the locals recognize his presence by its sound.
Ivanishvili vacationed at the resort with his family in 2018. He immediately saw potential in the dilapidated resort and announced grand plans. “Abastumani should become one of the best centers in the world,” he declared.
Although no longer holding an official position, Ivanishvili directed the government to create a master plan for the development of the resort area. This plan was quickly prepared and approved under a state of emergency during the pandemic.
In an interview with bm.ge in June 2022, Ivanishvili’s advisor Soso Tkemaladze recalled a typical remark from Ivanishvili toward the government: “Money is my business; yours is to raise this place.”
Numerous infrastructure projects began. The water supply system was completely repaired, new roads and sidewalks were built, and several old houses on the main road had their wooden facades restored. The renovation continues today, transforming Abastumani into a modern resort while preserving its historical charm.
Locals agree the infrastructure desperately needs repairs that will undoubtedly benefit everyone to some extent. But Ivanishvili is likely to benefit the most.
263 million lari ($US95.6 million) has been spent from the national budget on infrastructure improvements. Few locals are aware of this; they often attribute the ongoing works to Ivanishvili’s philanthropy. In an Abastumani Facebook group, posts and comments frequently praise Ivanishvili for his contributions, rarely mentioning the public funds financing these works.
The perception of Ivanishvili’s generosity is reinforced by government and biased media narratives, portraying these developments as solely due to Ivanishvili’s efforts and presenting his informal rule in a positive light. The ruling Georgian Dream party that Ivanishvili founded promotes his philanthropy on social media, often framing his profit-oriented business ventures as gifts to the people.
Given this context, predicting how Abastumani residents will vote in critical parliamentary elections this October seems obvious.
Apart from electoral benefits, Ivanishvili has gained personal advantages in Abastumani. Since 2018, five companies linked to him have acquired 4.2 hectares of land from the government at a time when almost no free plots were left in Abastumani. Ivanishvili built his palace on some of this land and two hotels are under construction on the rest.
Before the 2012 elections, Georgians had hoped the country’s wealthiest individual, upon coming to power, wouldn’t take government resources and budget money. But the current state of this resort, nestled in the pine forest, tells a different story.
How Did Ivanishvili Acquire the Land?
When I began working on this article, I conducted a small experiment and commissioned a private real estate appraisal company to evaluate a property bought by Ivanishvili’s company. The plot belongs to LLC “Seaside View,” with the code 61.11.21.020. The National Agency of State Property sold this land in 2019 for an average of $US55.5 per square meter. In September 2022, the private appraisal determined the market value of one square meter of land to be $US$276.
Since 2013, the government has sold 49 plots in Abastumani at auction. Only five were sold between 2013 and 2017. The demand for land in Abastumani grew alongside Ivanishvili’s interest in the resort, beginning in 2018.
The National Agency of State Property conducts auctions through its website. I analyzed all the announcements on the site related to Abastumani. I found that the agency sold 64,344 square meters of land in Abastumani and its surroundings over the years. Of this, 42,458 square meters (66 percent) were bought by Ivanishvili and his companies.
On August 30, 2018, LLC Emerald was founded by Irakli Katsadze, On September 24, it was sold to Ivanishvili’s Cartu Group for $US38. Before selling the company, Katsadze managed to buy 3,128 square meters in a government auction, paying $US97,546 ($US31 per square meter).
In 2020, Cartu Group built a multi-apartment residential building on this land. The apartments were given to families who had to leave their homes due to Ivanishvili’s projects.
Another company linked to Ivanishvili, LLC “Rainbow,” bought 7,836 square meters of land from the government for $ US298,821 between 2018 and 2020, paying an average of $US38 per square meter.
LLC Rainbow combined this land with other plots it owned and is now building the “Paragraph” hotel on this 18,545-square-meter territory, financed by Ivanishvili’s Co-Investment Fund. The hotel will feature 150 rooms, a pool, a restaurant, a conference hall, a spa, and a terrace with a 360-degree view. Locals remain uncertain about when the hotel will open. The project status on the Co-Investment Fund’s website is still listed as ongoing, with $60 million invested so far.
Advertising banners for Abastumani’s “Paragraph” hotel boast magnificent forest views. But in the vicinity of this luxurious hotel, there are dilapidated houses. From the opulent spa balconies, guests will easily be able to see the corrugated iron roofs. Residents fear their houses will be demolished to prevent them from ruining the views for “Paragraph” guests.
Lana (name changed) lives with her husband and children in the neighborhood below the “Paragraph.” Their major source of income is renting rooms to vacationers. Lana collects pollen from pine cones in the forest, which is believed to be beneficial for the lungs. She sells it for five lari per spoonful.
“They will kick us out of this neighborhood,” says Lana. “Such beautiful 7- or 9-story buildings are being built over our heads…and then look at our ruined, destroyed houses…doesn’t it spoil the view?”
So far, no one has informed Lana and her neighbors about resettling in another area. There is also talk of rehabilitating their houses, but Lana remains uncertain about their fate.
Another hotel construction linked to Ivanishvili is on land purchased from the government. LLC Seaside View bought 23,585 square meters for $US1.3 million in March 2019, about $US56 per square meter.
In October 2019, the same company bought 1,751 square meters of land on Paliashvili Street for $US24,269, only $US14 per square meter. The plot previously housed the dilapidated Soviet-era sanatorium “Zekari,” which treated tuberculosis patients. The sanatorium building was demolished, and Cartu Group built a new rehabilitation center in the village of Abastumani.
Construction is now underway on the site of the old sanatorium. Locals do not know what is being built there. The area is surrounded by tall cypress trees. During my stay, I managed to glimpse well-kept meadows, decorative plants, and trimmed grass through a gap while they were replacing cypresses.
According to official documents obtained from the public registry, a hotel is being built on this site. The construction permit was issued by the Adigeni Municipality in May 2019. LLC “Seaside View,” which is 100 percent owned by the Panama-registered company “Limestone Finance International,” is behind this project.
LLC “Seaside View” acquired another plot in 2018, transferred by the government to a company registered in the offshore economic haven of Belize. The National Agency of State Property sold 4,613 square meters to JSC Gavelton Investments Limited for $US137,000 ($US30 per square meter). Records in Belize are closed to researchers and journalists, but in September 2020 JSC Gavelton Investments Limited transferred the plot to LLC “Seaside View” for $US121,747.
The most famous landmark in Abastumani is the Romanov palace, now owned by the Georgian Orthodox Patriarchate. Nearby, hidden from prying eyes, lies Ivanishvili’s palace.
Land near the Romanov palace was first acquired by Ivanishvili’s wife, Ekaterine Khvedelidze, in 2018. She paid $150,000 Otar Tateshvili for a 450-square-meter plot ($US333 per square meter). Subsequently, surrounding government-owned lands were consolidated. In 2019-2020, LLC “Abastumani 2019,” also owned by the Panama-registered “Limestone Finance International,” bought 1,505 square meters for $US68,818 ($US46 per square meter).
One private owner sold land to Ivanishvili for $US333 per square meter. Another private individual, Gogi Darcimelia, sold 450 square meters for $67,500 in 2019 ($US150 per square meter). That’s compared to the government’s sale price of $US46 per square meter.
I asked locals about land prices and whether any plots were for sale. They told us prices varied widely, had become very expensive, and that finding a free plot would be difficult.
During my first visit to Abastumani, in 2022, near the Romanov palace, there was a banner announcing that an owner was selling land. We called and inquired. The land had already been sold for $300 per square meter.
How does the government calculate the price of real estate sold to Ivanishvili? These lands were managed by the National Agency of State Property, which oversees any property on the government’s balance sheet and handles its privatization. Before privatization, the agency typically requests an appraisal from the Samkharauli National Forensics Bureau to determine the market value of the property.
Based on the document received from the Samkharauli Bureau, the agency decides the price at which a property will be put up for sale. We requested such appraisals for all the plots transferred to Ivanishvili’s companies, but the agency did not respond. They also did not answer other questions regarding the conditions under which the decisions to privatize lands in Abastumani were made and how it happened that the government sold lands to companies linked to the richest person in the country at prices three or more times below market value.
We also reached out to “Cartu” and the “Co-Investment Fund” because we could not find another way to directly address our questions to Bidzina Ivanishvili. We did not receive a reply from “Cartu,” and the “Co-Investment Fund,” as expected, responded that these issues did not concern them. Our request for assistance in relaying our questions to Ivanishvili was left unanswered.
What is the Ivanishvili Building in Abastumani?
The house I stayed in during my time in Abastumani was a five-story Soviet-era building. From the outside, it was well-plastered and painted. Inside, it had dilapidated, crumbling walls. Ancient features had not been touched for decades. A similar building stood in front of it. Both buildings had been externally renovated by Cartu, but the interiors remained untouched, as evidenced by photos.
Cartu became interested in these houses because they directly face the cliff that separates Ivanishvili’s residence from the rest of the world. During my stay, I saw this cliff open twice in 10 days. On the evening of June 13, black jeeps and patrol cars appeared in the neighborhood. I hadn’t seen patrol cars anywhere in Abastumani for a week. Locals said they only appear when Ivanishvili is there.
On the morning of June 14, I heard a helicopter and saw it land in a specially prepared area. The billionaire was then escorted to his palace by jeeps.
Residents told me that Ivanishvili used to visit with them more often, take photos, and make promises. They said he hadn’t talked to them lately.
Of the many promises made to the residents of Abastumani, one particularly stood out: the introduction of electric vehicles. In 2018, Ivanishvili announced that Abastumani would become the first city in the South Caucasus to operate solely with eco-friendly transport. According to his vision, to maintain clean air at the resort, only electric vehicles should operate there. He promised electric vehicles would be given to the locals for free. But there are no electric vehicles visible at the resort.
On the road to Abastumani resort is the village of Abastumani, where an electric vehicle parking lot has been under construction for the past five years. The parking lot is being built by the government’s Municipal Development Fund on a plot of land up to 4 hectares, at a cost nearing $US31 million. Initially slated for completion in 2023, the construction is still ongoing.
If the project is ever completed, visitors to Abastumani will leave their cars at this parking lot, rent an electric vehicle, and reach the resort in an eco-friendly manner.
Fulfilling the oligarch’s vision of completely clean air at the resort has cost the budget additional millions, with the expenses primarily covered by the Municipal Development Fund. In 2023, the Adigeni Municipality also spent $US96,000 to set up an evacuation road near the parking lot. To put this into perspective, the entire Adigeni budget for 2023 slightly exceeded $US5 million.
A road was planned to connect Abastumani to Baghdati in western Georgia. Construction began before Ivanishvili’s involvement, with more than $US1.2 million allocated for the work. However, due to Ivanishvili’s vision, this construction was halted, and the project was modified to include a road bypassing Abastumani.
The cost of constructing the 12-kilometer Abastumani bypass road is over $US31 million. Forest cover has been cleared in an environmentally protected area called the “Emerald Network”. Neither the bypass road nor the main road connecting Abastumani to Baghdati has been completed.
According to the Minister of Economy, Abastumani will be ready to receive tourists at full capacity by 2025. Initially, it was announced that vehicle movement in the resort would be restricted in 2024. It seems Ivanishvili planned to open the resort earlier, but progress has lagged.
In 2018, Ivanishvili publicly announced in Abastumani that this large-scale ambitious project was his endeavor, supported by the Cartu Fund. However, the funding from Cartu pales in comparison to the expenditures from the national budget, much of which, through tenders, ended up in the pockets of businessmen loyal to the Georgian Dream party.
Transparency International, an international organization focused on corruption and transparency, reported at the end of 2022 that more than 93 percent of all government expenditures in Abastumani from 2012 to 2022 occurred after Ivanishvili’s visit in August 2018.
According to media reports, Cartu has spent more than $US2.5 million in Abastumani so far, with most of the funds allocated to projects directly serving Ivanishvili’s goals. For example, Cartu built a lung center in the village of Abastumani after the old sanatorium, where tuberculosis patients were still being treated, was bought and demolished by Ivanishvili’s company to make way for a hotel.
The Cartu Fund also financed the renovation of the Romanov Palace, which is closed to visitors. The official owner is the Georgian Orthodox Patriarchate. Cartu also funded the rehabilitation of the ambulance station in Abastumani for $US220,540.
During my visit, I tried to gather local opinions from about 15 people. None of them wanted to speak publicly; their expressions would change at the mention of a journalist. Those who did share a few words asked me not to use their quotes or their names.
If I started conversations like a vacationer, people spoke more openly. Many expressed gratitude towards Ivanishvili for taking an interest in the abandoned resort. However, when they realized I was a journalist, their comments were more reserved. They acknowledged that what Ivanishvili is doing for Abastumani seems beneficial but admitted they have not yet felt the direct impact. In Abastumani, there is still hope that once the resort is fully operational, residents will see the benefits of this development reflected in their own lives.
