In the summer of 1946 a group of Niceville veterans began gathering in City Hall to form an American Legion Post. The plans came together and were completed on August 15, 1946. The Charter for American Legion, Oliver D. Nichelson Post 221 of Niceville was official, with 15 charter members. J.C. Helms was the first Commander. A short time later, Cecil L. Anchors was the first elected Commander.

The land the Post was built upon was donated by a member of the Meigs family. Post members borrowed $5,000 from a man who ask for no collateral and built a 30-by-70 foot building on John Sims Parkway.

At that time, John Sims Parkway was a dirt road. They had numerous fish fries (probably mullet) and dance parties to pay off the loan. Since it was the largest building in Niceville, many others used it for meetings and parties. At that time there was no air conditioning and it got very hot inside, so they poured a concrete slab behind the building for outside gatherings and square dances.

The Post was named in honor of Corporal Oliver Daniel Nichelson, son of Thomas and Alvaretta Nichelson of Niceville. Oliver was Niceville's first causality of WWII. He had enlisted in the U.S. Marines in December 1939 in San Francisco and was serving in the Marine detachment aboard the USS Lexington (CV-2) in the Coral Sea.

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