The homicide occurred on the night of Jan. 8 at the Mexicali Club at 939 Oakland Road, police said.
Surveillance footage released earlier this year shows a suspect wearing a ballistic vest and attempting to kidnap the owner, 28-year-old Humberto Sanchez, at gunpoint.
Detectives believe that suspect is Velasquez and have obtained a warrant for his arrest. Police said he is "extremely dangerous."
That evening, Antonio Allon, 31, Manuel Barraza, 29, and Velasquez allegedly entered the bar armed with guns intending to kidnap Sanchez over a debt, police said.
A fourth suspect, 32-year-old Hector Milla, of Salinas, allegedly waited outside as the driver of a getaway vehicle.
When the three suspects entered the bar, they were confronted by Manuel Mendosa, 26, who was armed with a firearm, police said.
A gun battle broke out, and Allon and Mendosa died inside.
Barraza escaped the bar but suffered fatal injuries and was found later in the getaway vehicle, which was located near the bar the next morning, according to police.
Barraza and Allon are Salinas residents.
Sanche was shot several times, but was in stable condition. He is a resident of San Lorenzo.
Milla, who is also known as Arnaldo Perez Santana and goes by "Mono," remains at-large. A no-bail warrant has been issued for his arrest.
The getaway vehicle is a two-door black 1997 Ford Explorer SUV with California license plate No. 6NOE692.
Anyone with information about the case is asked to call Detective Sgt. Dave Gutierrez or Detective Brian Spears at (408) 277-5283, or visit http://svcrimestoppers.org.
Information provided could be eligible for a reward.
The video can be accessed on the Police Department's website at http://www.sjpd.org/iNews/viewPressRelease.asp?ID=519.