Okay. So should I stick with 'Prefix: /usr/local' and %{prefix}?
Only if you're going to use /usr/local. But you shouldn't.
If your package is not relocatable, don't use Prefix: at all.
Also, can you elaborate on the 'misguidedly'. I was originally going
to set the prefix to /usr but someone on my team told me that
/usr/local is where non-system installed packages should go.
I originally thought that /usr was for ANY managed package, and
/usr/local was for things compiled from source. Is that the correct
interpretation.
Yes, you are correct. Your teammate is wrong.