Heh, that's a bit vague...
/me cooks up a Palace facility that looks and behaves exactly like a Space Yard, only it has a different name
Seriously, Golden Eclipse has some "imperial manufacturing/research/mining/etc. capital" facilities much like Galciv does, and those seem to work pretty well - what they do is provide a huge system-wide bonus to whatever type of capital they are (I think they start at 100%

), but only one is effective per empire (if that requirement actually works - if not, the new facility counting functions from v1.52 should take care of that!). So you start out building all of your capitals in your home system probably (or maybe you don't because they are pretty darned expensive), and reap huge bonuses to production, but once your empire expands enough you might find some super-mineral-rich system that you want to designate the new mining capital - well, you scrap the mining capital and build a new one in the super-rich system!
So a "palace" facility could work like that - maybe instead of a 100% bonus to one thing, it could provide like a 25% bonus to everything...
Or it could improve happiness in the system... or maybe even provide resistance to boarding/subversion for all nearby ships (not sure how you'd do that though...)
But in any event it would have to have one of the following to prevent abuse:
1. A "one per empire" requirement
2. An exorbitant build and/or maintenance cost, so only large empires can afford more than one. (Those nobles do need a lot of bling bling to get by

)
3. A special negative resource production ability which depends on the number of palaces in your empire (using the new facility counting functions) - you might be able to have one palace maintenance free, or two for 10000 resources per turn, or three for 50000 resources per turn, or four for 250000 resources per turn...
4. Some other negative effect - maybe it produces 10000 negative research points (decadence implies laziness) or 10000 negative intel points (prime target for terrorists)... or maybe it reduces the planet's or system's space yard rate (see the negative research rationale)...
So yeah, Narf, your "palace" idea really raises more questions than answers
