After many trials and errors, I found the solution. There's no need to concatenate using the + and the ''''' to get one quote mark. SWQL is already parsing and concatenating, so you just need to insert the single quote mark:
Local time: ${SQL:Select DATEADD(hh,DATEDIFF(hh, GETUTCDATE(), GETDATE()),(''${CustomPollerStatus.DateTime}'))}
I hope this helps someone else