San Leandro’s city manager admitted this week that he successfully pushed the City Council to award a $1.5 million loan to a community organization directed by a woman with whom he regularly met in her SUV and who now accuses him of sexual harassment.

City Manager Chris Zapata said he is stepping away from his dealings with the nonprofit organization, the Davis Street Family Resource Center, and its leader, Rose Padilla Johnson. San Leandro officials have retained an investigator to probe allegations of misconduct.

Zapata, in a 23-page letter to the center’s board of directors emailed Tuesday, disclosed that he lobbied for the loan even after a council member raised concerns about the organization’s ability to pay the money back because it was having financial difficulties. In addition, he admitted that he initially did not properly record the center’s property that it had put up as collateral for the loan.

His letter responded, in part, to allegations by Johnson that he retaliated against her for rejecting his sexual advances by demanding immediate repayment of the city loan.

In a letter her attorney sent to San Leandro city officials last month, Johnson accused Zapata of inappropriate behavior that included romantic overtures and frequent comments about her physical appearance. She said he would make remarks about her outfits and painted toenails and once suggested, “If you were not married, I would really go for someone like you.” He gave her Spanish music mixtapes, Johnson said, which contained overtly sexual lyrics.

The letter from attorney and former Oakland City Councilwoman Jane Brunner asked the city to investigate the claims and demanded that Zapata stop making defamatory statements about Johnson. San Leandro City Attorney Richard Pio Roda declined to comment.

Johnson said that during one of their first encounters, Zapata said they should meet at a Fosters Freeze near her workplace, rather than at either of their offices. Once they got there, he suggested they sit in her car. The setup and location of their meetings became a common occurrence, and the pair would discuss topics both professional and personal.

City of San Leandro / courtesy

Zapata, who didn’t respond to requests for comment, denied all inappropriate behavior and wrongdoing in his letter, but acknowledged he shouldn’t have met with Johnson in her Lexus SUV. He described it as a convenient meeting place.

In an interview with The Chronicle, Johnson said she considered Zapata a friend and that his comments didn’t overly disturb her at the time. But after the 2014 death of her husband, retired Alameda County Fire Chief Bill McCammon, Johnson said, some of their interactions became uncomfortable.

Johnson said the city loan came about after she told Zapata about her organization’s financial troubles as it sought to open a health clinic. She said he suggested that she apply for a city loan. He claims it was she who asked him whether the city could provide a loan.

Late Tuesday, Zapata sent a letter to the nonprofit, firing back with his own accusations of impropriety by Johnson and the president of Davis Street’s board of directors, Gordon Galvan, a former San Leandro City Council member and businessman. Zapata detailed a series of shadowy political back channels and dealings, some involving the nonprofit and others with no connection to the group. And he accused Johnson and others of holding ulterior motives for their charges against him.

Galvan said the letter from Zapata included inaccuracies and fabrications.

The letter, at times incoherent, acknowledged that his job was on the line and claimed that Johnson and Galvan were retaliating against him for perceived delays in obtaining a cannabis permit for the Davis Street Wellness Center, a separate organization that will give a portion of its profits to the Davis Street Family Resource Center when it opens this year.

The name resemblance and relationship between the two groups created some confusion in the city during the permit process, Zapata and others said.

The resource center gives low-income families and people with developmental disabilities services such as child care, food donations, counseling, free clothes and health care. Some City Council members voiced concerns about the location of the cannabis dispensary, which will be next door to the nonprofit.

Mayor Pauline Russo Cutter, seen as a political ally of Zapata’s, said Wednesday she was in a daylong meeting and couldn’t immediately respond to questions but confirmed the investigation into possible misconduct. Cutter and Pio Roda, the city attorney, both said they had no knowledge of Zapata’s letter prior to him sending it Tuesday.

“Although the city hired the investigator, the investigator has full control over the investigation and is completely independent,” she said in a statement. “The investigation is confidential, so at this time, the city does not have additional information about the investigation. The allegations are allegations at this point. The city does not know when the investigation will be complete, but will update the community when there are developments in the investigation.”

According to Johnson’s telling and her lawyer’s letter, Zapata helped fast-track the $1.5 million loan’s approval, placing it on the counsel’s consent calendar after a short presentation in the summer of 2014. The money was leveraged to open a primary care clinic at the center that provides dental, medical and behavioral health services to low-income patients.

After getting an initial three-month extension on the two-year loan, Johnson said she still couldn’t yet pay it back. She said reimbursements from the federal government weren’t coming as fast as she had anticipated.

Around that time, in October 2016, during their last car meeting — this time in Zapata’s vehicle — Johnson said she asked him again for an extension on the loan, to which he replied, “Rose, you have the key.” She took his words to be a sexual suggestion.

“I remember looking at the door handle and thinking I need to get out,” she said. Johnson said that after she exited the vehicle, Zapata tried to block her path as she walked to her car. Within hours of the incident, Johnson confided in her assistant, Adrian Williams, who recalled the same details as Johnson and said her boss appeared shaken and distressed.

A few weeks later, Zapata sent a letter demanding repayment of the loan, writing, “The repeated failure to meet contractually obligated payments, coupled with promises and representations made in writing that were clearly broken or untrue, creates serious doubt” that Davis Street would be able to pay back the loan.

Johnson said she eventually got a lender to repay the city and that Davis Street is back to having a surplus.

In the months after her falling out with Zapata, Johnson said, she heard from a series of influential people in the community, including donors to her nonprofit and old friends, that he was saying “nasty” things about her and casting her as a liar.

Kimberly Veklerov is a San Francisco Chronicle staff writer. Email: kveklerov@sfchronicle.com Twitter: @kveklerov