Hi Derrick
Back in November I built a website for a client that is already ranking between 1 and 4 for several keywords and I had similar concerns at the outset. One thing I noticed about that report you ran was that all the directory style competition had very low page authority scores. Good page authority can outrank directories.
What I've written below is based on what I did...It started off with a lot of work in the initial set up, but it's generally just a couple of hours maintenance a week..
As it's local, get a google + page and link the page to your site and focus on getting some good social signals for each page - tweet your pages, facebook like and share you pages, google +1 your pages and so on and if you are blogging, do the same. A good bit of content and plenty of social sharing can work wonders. Set up social media accounts on a few of the main networks and use them to really connect and bulid relationships, rather than churning our rss feeds.
Also ensure you have cast iron on page, pick a keyword per page and make sure the page fully reflects that keyword so that when a search lands on it they are truly finding what they are looking for. Have that keyword in the title tag and a good meta desc that tells the user what your page is about. Don't stuff the page with the keyword, just make sure it appears a couple of times, particularly in headings if you have it broken up.
You can also get yourself some free decent directory links - proper local business directories, not spammy ones and industry specific national directories.
The verified google plus page is invaluable and you can well optimise your google+ page, get reviews etc.