Project.repository should never be nil so you can call repository.exists? or repository.empty?

Also specify separate project factory for project with filled repo

spec/spec_helper.rb

@@ -47,11 +47,7 @@ Spork.prefork do
     config.use_transactional_fixtures = false
 
     config.before do
-      # Use tmp dir for FS manipulations
-      temp_repos_path = Rails.root.join('tmp', 'test-git-base-path')
-      Gitlab.config.gitlab_shell.stub(repos_path: temp_repos_path)
-      FileUtils.rm_rf temp_repos_path
-      FileUtils.mkdir_p temp_repos_path
+      TestEnv.init
     end
   end
 end