create method

def create
    @project = Project.new(params[:project])
  	if @project.valid?
  		output = Project.myname(@project.project_name)
  		flash[:notice] = @output
  		redirect_to projects_url(output)
  		# render text: @output, location: projects_path(@output)
  		# redirect_to projects_path
  	else
  		render "new"
  	end
  end

output = Project.myname(@project.project_name)
flash[:notice] = @output

Those lines don't make sense. you need to have
flash[:notice] = output
as output is not an instance variable, it is just a local variable