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The Controller:WaterCoil object tries to measure air temperature (sensor) in order to know how to alter water flow rate (actuator). From the error message that you posted, it seems like the entering water temperature (actuator) is 35.79 $^{\circ}$C / 96.4 $^{\circ}$F, which is not close to the 42 $^{\circ}$F that you are expecting. I would double-check the setpoint manager controlling the last chilled water supply node after the DistrictCooling object.
It's fine to not have a condenser water loop, since the district heating and cooling components don't have a heat rejection process that needs to be simulated.