Environmental impact studies began on the part of SR 125 south of SR 54 in 1987. In 1990, Caltrans proposed building the southern portion as a toll road, operated by private firms; California Transportation Ventures (CTV) and PrivaCAL both applied for the role. In September, state officials approved this proposal, which was expected to cost $400 million. In the 1991 agreement, Caltrans agreed not to build more than one high-occupancy vehicle lane in each direction on I-805 to reduce competition from SR 125. CTV soon declared that they would be considering many potential routings for the road, including some that Caltrans had declined. The next year, while the company hoped to start the environmental impact study, objections were raised about increased pollution and traffic from the road, as well as the part of the franchise agreement that would allow for the company to collect a settlement if SR 905 was constructed with more than six lanes, since it would compete with the proposed toll road.