The tugboat Pegasus was built in 1907 as S.O.C. No. 16 , for the Standard Oil Company of New Jersey, by the Skinner Shipbuilding Yard of Baltimore, Maryland.
The Skinner yard had a long history. There had been shipbuilding on that site at the foot of Federal Hill since 1783. Zachariah Skinner established his yard there in 1832 to build small schooners for the Bay and coastal trades. By the 1870s, the yard had produced some of the finest steamboats operating on Chesapeake Bay.
The yard survived into the 1980s, at the end under the ownership of the Bethlehem Steel Company. Bethlehem preserved most of the Skinner plans from the early twentieth century, including many for No. 16 and her sisters.
McAllister Towing of New York, New York acquired the tug. The company repowered the tug with a modern 900 horsepower diesel engine manufactured by General Motors,
Hepburn Marine ultimately bought the John E. McAllister in 1987, in Norfolk, where she was doing transport work for McAllister. She was brought back to New York as the tug Pegasus, where she was engaged in general harbor towing towing of oil barges, contractors rigs and barges and railroad carfloats, and transport work. She was retired in 1997, at 90 years old, when the preservation effort began.
Pamela went to Gerry Weinstein, Jim Clements, Norman Brouwer, and Sandy Balick to found the Tug Pegasus Preservation Project. The New York State Charter was initiated on 10 November 2000.