SAN JOSE -- At least for now, the Bay 101 cardroom has lost its bid to move to Milpitas after the state Legislature killed legislation that would have made its relocation possible.
Assembly Bill 2549, which would have eliminated procedural impediments for Bay 101 to depart San Jose, failed to get out of the Senate Rules Committee after clearing the Assembly.
The state Legislature adjourned early Saturday morning without approving the bill, said Fred McFarlane, a spokesman for the measure's author, state Assemblyman Sebastian Ridley-Thomas, D-Los Angeles.
"The bill died," McFarlane said. "That's where things stand."
Bay 101 officials have been seeking a new site for the gambling complex, adjacent to Highway 101, because the current location is slated to be bulldozed within a few years to make way for a portion of a vast office park being developed by realty firm Peery Arrillaga.
"Milpitas is willing to let us expand. San Jose is not willing to let us expand," said Brian Bumb, an executive in the family-run group that owns Bay 101 and the San Jose Flea Market.
San Jose voters rejected a 2012 city ballot measure Bay 101 sponsored that would have allowed a significant increase in gaming tables at the city's two cardrooms. And both of San Jose's mayoral candidates are unenthusiastic about Bay 101's desire for a more spacious cardroom.
Current state law prohibits a cardroom now in Santa Clara County from moving to another city in the county without the approval of the city where it is located. That effectively gives San Jose veto power over Bay 101's departure from the city, whose taxes, fees and regulations are among the heaviest in the state. The proposed legislation would have allowed a relocation of a casino to another city in Santa Clara County as long as the move was within the same county.
Both San Jose mayoral candidates, Councilman Sam Liccardo and county Supervisor Dave Cortese, said they wouldn't stand in the way of a Bay 101 relocation to Milpitas. But it would deliver a financial blow to San Jose, whose budget remains fragile: The city's two cardrooms generate some $15 million in annual tax revenue, more than the city's auto dealers.
Milpitas officials say a casino could operate in an entertainment district that the city envisions along its western border. The Milpitas City Council voted unanimously Tuesday to place a measure on the November ballot that if approved would allow a cardroom in the city.
The Bumb family has purchased a 16-acre San Jose site at the intersection of North First Street and Matrix Boulevard, across from its existing facility and a short distance from the Casino M8trix gaming complex. The potential new site for the casino is now occupied by a hotel called San Jose Airport Garden.
The family has submitted preliminary plans to San Jose officials. City planners are reviewing the proposal, but a final city decision has yet to be made, said Ralph Borelli, a veteran commercial real estate executive who handled the purchase of the new location for the Bumb family.
"The new site could have a casino, one or more hotels, hotels only, some retail, offices, or some combination of that," Borelli said.
A conceptual site plan filed last year with the city suggested razing the existing hotel and replacing it with a cardroom and two new hotels. It envisioned a cardroom totaling 87,000 square feet in two stories, plus a 10-story, 240-room hotel and nine-story, 230-room hotel, plus restaurant, office and conference space.
Ridley-Thomas' bill was approved by the Assembly in May and referred to the state Senate Rules Committee in early June.
It's not the first time such legislation has advanced in Sacramento. Sen. Ellen Corbett, D-San Leandro, carried a 2009 bill that also would have allowed San Jose cardrooms to move. She agreed to put it on ice at San Jose Mayor Chuck Reed's request.
Bumb says Bay 101's lease for its current site expires in November 2017, which means it would need to find a new location by then.
Bay 101 officials say they have gotten indications from Peery Arrillaga that the developer doesn't intend to extend the lease beyond that date. That means a construction window for a new casino, whether in San Jose or Milpitas, could be getting narrow.
Contact George Avalos at 408-859-5167. Follow him at Twitter.com/georgeavalos.