You need to secure that directory before the install. Use:
chmod o-w /usr/local
to do this. If that doesn’t work, the you probably need to be root (or otherwise suitably empowered) so you can try:
sudo chmod o-w /usr/local
and enter your password.
I’ve seen this sort of thing before on some software which really wants things set up in a certain way to ensure that its assumptions are met. In any case, it’s actually a bad idea to have world writable directories except when you know security on them is not a big deal.
/usr/local is important enough that you shouldn’t allow anyone to write to it.