change output directory of nuget package

In the 'old' way of NuGet (which you seem to use, check this for info on new vs old) this was possible by using the command in the .nuget\NuGet.targets file you mention. If you change the line with PackageOutputDir to below it will work.

<PackageOutputDir Condition="$(PackageOutputDir) == ''">C:\LocalPackageRepository</PackageOutputDir>

Even better would be to set a property on the PropertyGroup in the .csproj like this:

<PackageOutputDir>C:\LocalPackageRepository</PackageOutputDir>

In the new way of NuGet you would add this key to the NuGet.config file:

<add key="repositoryPath" value="C:\LocalPackageRepository" />