The city of Los Angeles may be forced to release bids on a 7.2-acre site in Van Nuys Airport that it had wanted to keep secret until a leasing agreement had been negotiated.

A state appellate panel ruled last month that the City of Los Angeles and its airport staff should have released bids to the public last year for the lease at the general aviation airport.

The ruling came in a case filed by Michaelis Montanari & Johnson PLC on behalf of an unnamed client who “has an interest in the outcome of the lease,” said partner Garry Montanari.

Airport officials refused to release the bids before they awarded the lease to billionaire developer David Murdock’s Castle & Cooke Aviation Services Inc., but they have had to re-evaluate their decision after the Board of Airport Commissioners refused to approve the award in July.

Aircraft firms had argued that Murdock got the lease because his firm gave $100,000 to Mayor James Hahn’s campaign to defeat secession of the San Fernando Valley and $1,000 to the mayor’s re-election campaign.

Calls to Steven Friedman, vice president of development and leasing at Castle & Cooke Aviation Services, were not returned.

The case mirrors part of City Controller Laura Chick’s 2003 audit of Los Angeles World Airports, which runs the Van Nuys facility. The audit criticized the department for maintaining inadequate documentation on many of its contracts and leases.

However, the city argued that it could not get the best value on a lease deal if it had to publicly release proposals “prematurely,” or before airport officials finished negotiating with the potential lessee, according to court documents.

A lower court judge agreed with the city’s position, but a panel in 2nd Appellate District reversed that in a split decision, stating the public must know about proposals in order to assure that the city is “not selecting these individuals or entities based on political favoritism or some other criteria.”

The city will have to release the competing bids later this month unless the ruling is appealed.

The city is “weighing its options and seriously considering petitioning the California Supreme Court to hear the case,” said City Attorney spokesman Jonathan Diamond.