"For the love of my community, and the health and well-being of my family, I am submitting my resignation as a council member," Grose wrote in a letter sent Monday to Interim City Manager Nita McKay and other council members.
Grose had initially said he would resign only from the ceremonial mayor post, but he planned to retain his council seat. Instead, he opted today to step down from the council.
Grose is not expected to attend tonight's council meeting. Grose said earlier he expected many people to attend the meeting to call for his resignation for forwarding to a small group of people a depiction of a watermelon patch superimposed on the front lawn of the White House.
The-mail, which Grose says was sent as a joke, bore the headline "No Easter egg hunt this year."
A smashed watermelon was found outside of Grose's business Wednesday.
Grose was elected to the council in 2006. He was chosen by the council in January to serve a one-year term as mayor.
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Former Mayor Ken Parker told NBC4 that "the best thing for him to do would be to step down from the council entirely so that the people of America can see this is really not what Los Alamitos is about."
McKay said in a statement Thursday that the e-mail "is not representative of our City Council, city staff and the community as a whole."
"We certainly do not condone perpetuating any stereotype associated with race, ethnicity, gender or religion," she said.
City employees said there have been at least 500 calls to City Hall, with some calling Grose insensitive and others saying the issue is overblown.
Grose, who apologized for sending the e-mail, said he has sought counsel from the Orange County Human Relations Commission "to acquire greater sensitivity following this incident."
Zalen Liley, a chemist who is black and whose office is across from Grose's medical equipment business, told NBC4 he cannot understand how Grose could make such a serious misstep.
"It's pretty idiotic for a public official to do something like that," Liley said. "You'd think he'd use more caution, you know, better judgment."
Grose has said that he did not recall sending the offending e-mail to Keyanus Price, a black community volunteer, who said she found it racist and offensive.
Price and Grose are members of a youth center board. Grose said last week that he and Price had exchanged "e-mail jokes in the past, and it was never my intention to cause any discomfort or embarrassment for Ms. Price. I am truly sorry."
Grose apologized to Price, her boss and the City Council. He said he did not send the e-mail to hurt or offend anyone.
He said he hoped Price would accept the apology in the spirit in which it was intended.