In 1961, St. Mary's no longer took boarders. The new convent opened and was blessed on November 17. The winter was rough and the schools had to be closed due to storage of natural gas. On January 24, 1962, Monsignor O'Sullivan laid the cornerstone for the new St. Mary's High School, which was blessed by Archbishop Gerald Bergan on April 25, 1962. Students started school in the fall of that year in the new building.

February 16, 1965- a day in our history that happened and will be remembered by both St. Patrick's Parish and the citizens of O'Neill. It was the day on which the mystery fire destroyed St. Mary's Academy. The fire was discovered near a basement shower room at 4:08 p.m. The alarm was sounded by a high-school student, John DeWitt, who had left the new St. Mary's High School to go to the original portion of the Academy to practice piano. He activated the fire alarm when he saw smoke. The alarm brought Phil Haverkamp, the school custodian, from the newer portion (west wing) to the fire detection station to determine where the fire was located. Sighting what appeared to be the source of the blaze, Phil met young DeWitt and ordered him to summon the fire department and then assist him in removing the Haverkamp family who lived on the third floor of the east wing. Also living near were three high school girls: Jane Muff of Clearwater, Sandy Pfiester of Long Pine, and Rita Schindler of Neligh. The fire was spreading fast. O'Neill's fire chief G. E. Miles invoked the countywide fire defense plan which brought firemen and equipment form Atkinson, Chambers, Page, and Stuart. The fire was now roaring through the whole east wing. Firemen had to protect the church, the rectory, the new high school and the hospital. The water pressure in the city dropped to the danger point. Water to several sections of the city had to be shut off for a time.

Fortunately most of the pupils and teachers had left the building when the fire was detected. The total loss might well be in the neighborhood of a half-million dollars. Many items destroyed will never be replaced. Flames and smoke in the winter's night sky were visible as far away as Lynch and Butte. Sioux City and Omaha news media sent airplanes to the scene. Thousands of persons congregated in the school playground, on the church parking lot, and in the streets to witness the flames. On the lips were prayers as brave men risked their lives against tremendous odds to remove highly explosive oxygen bottles (part of a civil defense emergency hospital unit in storage) and to search for anyone who might be in the once stout and elegant building. Many wept. Many lingered as dying flames turned into smoldering embers in the early morning hours. The St. Mary's Academy that was had yielded.

The school was gone and adjustments were made. Temporary school quarters were set up for three classes in the National Guard Armory and the rest were put in the public school. Books were loaned from St. Francis Mission. Desks were salvaged from the ruins and also some water-soaked books. Soon the insurance adjusters came and the insurance on the building was three-hundred-and-seven-thousand dollars. Wrecking crews tore down the ruins and plans for a new school with the designs of the new convent and high school were being drawn up.

Construction on the new elementary school began in September, and hot lunch program began for St. Mary's students at the public school on December 2. With the new construction project, the winter season brought its hazards. The water pipes froze due to exposure and water had to be hosed to the convent for the Sisters. It was an adjustment for them because water had to flow continuously so it wouldn't freeze in the hoses, but every now and then, one of the Sisters would forget and turn off the hose and once again there would be no water. There were blizzards and winds and even a few "black snow" storms.

On April 20, 1966, Monsignor O'Sullivan died at Bergen-Mercy Hospital in Omaha.

An addition was built on to the high school building in August and the new elementary school opened in September even though parts of the building were still not finished.

Modular scheduling began with the fall term at St. Mary's High School and Archbishop Bergan blessed the new St. Mary's Elementary School on October 8. A blizzard before Christmas in 1968 continued for ten days and really tied up the community.