Rec Room shows potential in industrial redevelopment

Well to the east of the developed side of Broad Ave. is Rec Room, Memphis' first barcade. Rec Room opened April 1 to a wave of 8-bit nostalgia, but its foundations are very forward-looking.

In a converted warehouse at 3000 Broad, pinball machines and old-school arcade games like Ms. Pac-Man and Tron light up the room's 20-foot ceilings, and the local beer is flowing. Food trucks idle outside facing the newly constructed deck. Tables for poker, foosball, Ping-Pong and air hockey provide low-key entertainment. Six giant HD projectors fill the entire 120-foot back wall with giant scenes of shooter games and combative cartoons. People can rent these screens and the corresponding couches and consoles for $10-$25 an hour.

The adult-targeted arcade is not a new concept, but the use of an industrial space for retail is an avant garde move in the Memphis market.

"We've got a lot of outdated building stock. Now it can be different, and it really has to be different. The warehouses are obsolete for the industry," said Taylor Berger, founding partner of Rec Room and several other commercial real estate concepts.

With the increased demand for e-commerce warehouses, such as Target's new 900,000-square-foot distribution center in Southeast Memphis, industrial properties have to meet a greater set of expectations. That means calling for higher clear height and 7-digit square footage. Rec Room is 10,000 square feet, and 6,000 square feet are presently open to the public.

Berger said that if developers can't find a way to use these older warehouses for retail or production, they're going to sit empty. Memphis has always been a distribution and industrial hub, but Berger believes that the nearer and smaller industrial parks, like those in Binghampton, are poised for similar consumer-facing redevelopment.

He admitted that he had a difficult time getting Rec Room on the right regulatory pages, and he believes that if this trend is going to grow, the rules need to grow with it.

"Memphis needs to lighten up on their regulatory rules, especially in these target, urban-core buildings that can be used creatively but can't be brought up to code," Berger said. "Memphis could get a lot more imaginative when it comes to letting business reuse space. It just becomes so that an end-user like myself can't do it."

He added that reconsidering building codes, which are now getting stricter attention in light of the City's crackdown on neglected properties, could actually ease blight.

"A lot of the reason that things remain blighted is that it's too expensive to get them up to code, so no one wants to take on that liability and get it up to code. Then you go to places like Portland, and their attitude is more like, well, why not, as long as it's reasonably safe," he said.

Early this year, Loeb Properties announced that it was going to rebuild the old Sears Factory Outlet at 2542 Broad, part of which has been used as the Broad Ave. Water Tower Pavilion gathering space. A giant multiuse redevelopment is in the works.

Rec Room represents the push necessary to take Broad to the next level, and Berger said that he's already looking at another sizable warehouse in the area. 

Read more articles by Madeline Faber.

Madeline Faber is an editor and award-winning reporter. Prior to joining High Ground News as managing editor, she worked as a staff reporter for The Daily News. She has also written for Memphis Business Journal, The Memphis Flyer and Inside Memphis Business. Her experience as a development reporter complements High Ground's mission to write about what's next for Memphis.
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