WordPress needs FTP access or Can't create directory

Some background:
Windows shop – IIS – host on our own – current 4.4.2 install – multisite is working.

We have a department that needs their own separate install that is independent of our networked sites. I installed WordPress in the root directory, added the appropriate information to IIS, created a new MySQL database and user with GRANT ALL PRIVILEGES, etc.

I was getting the form prompt for FTP credentials when trying to install a new plugin. I added:
define('FS_METHOD','direct');
to the wp-config file. After doing this it downloads the plugin but now I get the error that WordPress cannot create the directory. I feel like this is more of an issue with database permissions rather than editing rwx permissions on folders.

Where should I look to find the differences between the single install and the multisite install? Noob db question: should the “host” be localhost or should it be the url of the new site in the db section of wp-config? The Multisite install is localhost, however, when creating the site in IIS I had to add the url as the host for this site as IIS won’t run two localhost sites on port 80 at the same time.

Thanks in advance.