The de Blasio administration is walking away from a $115 million project to redevelop the South Brooklyn Marine Terminal in Sunset Park, citing the local councilman's demand for more control over the site than City Hall was willing to give.

The plan, which called for the "reactivation of maritime services specializing in handling automobiles and other roll-on/roll-off cargoes, plus the construction of a new, state-of-the-art municipal recycling facility," would have created 300 manufacturing and construction jobs, the city says. The 88-acre terminal is located along the waterfront in Sunset Park, Brooklyn.

The council was set to cast a procedural vote Wednesday reassigning the lease for the terminal back to the Economic Development Corp. from the Department of Small Business Services after a previous leaseholder, Axis Group, went bankrupt. But the vote was pulled, and the city is canceling the project because officials say Brooklyn Councilman Carlos Menchaca demanded too much control over the process.

Kyle Kimball, president and CEO of the city’s Economic Development Corp., said the councilman was being obstructionist, costing his district much-needed jobs.

"I guess what caught us off-guard was that ... in a district with a high poverty rate and stingy unemployment rates, he found the job-creation piece uncompelling," Mr. Kimball said. "I think we were surprised by that."

According to Mr. Kimball, Mr. Menchaca declined the city's suggestion to include the local community board in choosing tenants for the terminal project. Instead, he said, the councilman called for the creation of the local community development corporation that he would control to manage the terminal.

The city found that request "confounding," Mr. Kimball said. (Mr. Menchaca contends the board would have been controlled by the administration, not him.)

Mr. Menchaca claimed the city only began talks over the terminal's lease after Thanksgiving, leaving little time to formulate a plan. The councilman blamed city officials for trying to cut the council out of the process by demanding sign-off for a master lease that would give them total control over the terminal for several decades. Traditionally, the council is allowed some oversight over which developer is picked, but this would have allowed the city to sublease to anyone it chose.

"They've got no stock in Sunset Park," Mr. Menchaca said, referring to EDC's reputation in South Brooklyn as a leaseholder. "This is a new EDC with the same old tricks."

In a subtle swipe at Mr. Kimball, who is a holdover from the Bloomberg administration, Mr. Menchaca said, "We have a new mayor. I'm hoping that progressive juice is shared all the way down to the ground."

Later, he wrote a lengthy post on Facebook explaining his position.

Mr. Menchaca, a freshman in the council and a member of its Progressive Caucus, is politically aligned with Mayor Bill de Blasio. Both come from the liberal wing of the Brooklyn Democratic Party and enjoy close alliances with labor unions. In 2013, Mr. Menchaca defeated incumbent City Councilwoman Sarah Gonzalez, who was an ally of de Blasio rival Lew Fidler, then a Brooklyn councilman.

But the administration grew frustrated with Mr. Menchaca's demands during negotiations. Mr. Kimball noted that the councilman's interference in a deal between EDC and the Vane Brothers Co. to store empty bunkering barges at Pier 4 of the Brooklyn Army Terminal led the Baltimore-based marine transportation business to sign a lease elsewhere.

Under the original plan for the terminal, two tenants would occupy the 88-acre space once the project was completed: the Axis Group, a logistics company specializing in cars; and Sims Metal Management, which constructed a new recycling facility to handle the city's recyclables in 2013. But Axis went bankrupt in 2012, and the general manager for Sims told Crain's the current kerfuffle would have no impact on its business at the terminal.

Mr. Menchaca is still hopeful that a deal can be reached, and praised Council Speaker Melissa Mark-Viverito and the rest of the council for their support.

"I feel really strong moving forward," he said.