Cannot connect to the SharePoint site: . Make sure that the Site URL is valid, that the SharePoint site is running on the local computer, and that the current user has the necessary permissions to access the site.

Cause:
You may experience this issue on a development machine when trying to create a SharePoint project using Visual Studio 2010.

From the File menu the developer selected New->Project and then selected ‘Empty sharepoint project’ (SharePoint 2010) and then typed in the url into the dialog box that appeared and then hit the Validate button. Upon clicking the button, the following error message was shown:

Cannot connect to the SharePoint site: http://server:123/. Make sure that the Site URL is valid, that the SharePoint site is running on the local computer, and that the current user has the necessary permissions to access the site.

Solution:

1. Open up SQL Manager and navigate to Security –> Logins
2. Select the user that you’re using to create the VS project.if the user is not there, add the user.
3. Under Server Roles for the user tick as sysadmin