I saw no reason in posting here before because things were pretty much answered.
But since there appears to be a little confusion here:
I know the history of JTC, and yeah. They originally had an HQ which was powered down by a 3rd party. So they recycled it and built a MSD. As has been mentioned here MSD's do not allow new people to spawn into at this time, but I believe the old administration of JTC just had people spawn in or use NPC x-port to a nearby darkness planet where they operated out of.
"This faction does have the needed DC as it is in their inventory for HQ creation ... so they should be able to assign it to the Palace to make things work as they are supposed to in SWC."
No, that is never how SWC works. Factions have many DC's for facilities. None of them are ever assigned, they are all built. Merc factions do not build a hangar or a landing pad and then assign a barracks DC to them, trading factions do not build an office or other 1x3 and then assign a bank DC to them. They just build a barracks or a bank. Only reason why HQ DC's show up at all in your inventory at all is because you have a limited number of them based on your member count which makes them unique. You are confusing production DC's with facility DC's.
Only time conversion ever happens is at creation, after that all facils are built, never assigned. Do not worry, you are not the only one who has been confused over this. I have closed a few bug reports for the very same thing. Hopefully my explanation helps.
SWC VIDEO Tutorials!
Faerytail Do NOT Trade List