A Southern California investment firm that owns a small stake in Bally’s Corp. said the casino operator should sell its interest in the now-closed Tropicana Las Vegas because the company has “no ability to fund” any new development on the Strip.

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The letter comes as Bally’s is carrying more than $3.6 billion in long-term debt and is facing an $800 million shortfall in its agreement to build a $1.7 billion casino resort in downtown Chicago — leading company Chairman Soo Kim, whose New York City-based Standard Growth hedge fund is the company’s largest stockholder, to offer a $15 per share buyout offer to take the company private. On Monday, Fitch Ratings Services downgraded portions of Bally’s debt to a negative rating — a potential default on its loan obligations — due to the company’s “relatively high” debt, which could affect its ability to finance new developments.