Strange ‘NOSERVER_FLEX_OUTPUT_FOLDER’ Error

I was having trouble with FlexBuilder so I upgraded to ver. 3.1. Ever since then I've been receiving the following error.

'NOSERVER_FLEX_OUTPUT_FOLDER\bin-debug\' is not a valid location. The location is relative to undefined workspace path variable 'NOSERVER_FLEX_OUTPUT_FOLDER'.

If I go into the project properties and remove 'NOSERVER_FLEX_OUTPUT_FOLDER' from the Output Folder path I can compile the project. However, when I reopen the project that path gets put back in there and the project won't compile again. Anybody else experience this and know how to fix it?