docs: add local development setup guide

- Document npm link workflow for unpublished L3 constructs package
- Include troubleshooting steps for common issues
- Explain LOCAL_L3_PATH alternative approach
- Helps developers work with local packages before npm publication

Author: tejaskash

LOCAL_DEV_SETUP.md

@@ -0,0 +1,122 @@
+# Local Development Setup
+
+This guide explains how to set up the agentcore-cli for local development when the L3 constructs package is not yet published to npm.
+
+## Prerequisites
+
+- Node.js >= 20
+- npm
+- Both packages cloned as siblings:
+  ```
+  workspace/
+  ├── agentcore-cli/
+  └── agentcore-l3-cdk-constructs/
+  ```
+
+## Setup Steps
+
+### 1. Install and Build the L3 Constructs Package
+
+```bash
+cd agentcore-l3-cdk-constructs
+npm install
+npm run build
+```
+
+### 2. Create Global npm Link
+
+```bash
+npm link
+```
+
+This creates a global symlink that makes `@aws/agentcore-l3-cdk-constructs` available to other local projects.
+
+### 3. Build the CLI
+
+```bash
+cd ../agentcore-cli
+npm install
+npm run build
+```
+
+### 4. Create a Test Project
+
+```bash
+npm run cli create
+```
+
+Follow the prompts to create a new project.
+
+### 5. Link the L3 Constructs in the Generated Project
+
+The generated CDK project includes a postinstall script that automatically attempts to link `@aws/agentcore-l3-cdk-constructs`. However, if npm install was run before you created the global link, you may need to manually link it:
+
+```bash
+cd <your-project>/agentcore/cdk
+npm link @aws/agentcore-l3-cdk-constructs
+```
+
+Alternatively, you can re-run npm install to trigger the postinstall script:
+
+```bash
+npm install
+```
+
+### 6. Build and Test
+
+```bash
+npm run build
+```
+
+## How npm link Works
+
+1. `npm link` in the L3 package creates a global symlink
+2. `npm link @aws/agentcore-l3-cdk-constructs` in the CDK project creates a local symlink to the global one
+3. Changes to the L3 package are immediately reflected (after rebuilding)
+
+## Troubleshooting
+
+### "Cannot find module" errors
+
+Make sure you've built the L3 constructs package:
+```bash
+cd agentcore-l3-cdk-constructs
+npm run build
+```
+
+### Link not working
+
+Re-create the links:
+```bash
+# In L3 constructs
+npm unlink
+npm link
+
+# In generated CDK project
+npm unlink @aws/agentcore-l3-cdk-constructs
+npm link @aws/agentcore-l3-cdk-constructs
+```
+
+### Changes not reflected
+
+Rebuild the L3 constructs package:
+```bash
+cd agentcore-l3-cdk-constructs
+npm run build
+```
+
+## Alternative: Using LOCAL_L3_PATH
+
+If you prefer, you can set the `LOCAL_L3_PATH` environment variable before running create:
+
+```bash
+# Windows PowerShell
+$env:LOCAL_L3_PATH = "C:\path\to\agentcore-l3-cdk-constructs"
+npm run cli create
+
+# Windows CMD
+set LOCAL_L3_PATH=C:\path\to\agentcore-l3-cdk-constructs
+npm run cli create
+```
+
+This will automatically use `file:` protocol in package.json instead of requiring npm link.