Irene Donoshaytis, 65, of Northfield was accused of hitting the man after telling his group of friends they had to leave.
The alleged victim told ABC 7 Chicago that he believes the attack was racially motivated. He caught the confrontation on camera as he ended a 15-mile bike ride late last month.
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The Cook County State's Attorney office said police are still investigating the incident.
Otis Campbell, 25, said he and his friends were at Tower Pier near the Winnetka Beach for less than five minutes when a woman told them they had to leave.
"I need to see your passes," the woman can be heard saying on the video.
"As soon as she told us that 'we needed passes, and we could not be here, this is Winnetka and she pays to be here and this is America,' I took it upon myself to start recording her," Campbell said.
The video captured Donoshaytis confronting Campbell, questioning whether the group had beach passes.
"There was multiple people coming down the pier doing exactly what we did," Campbell said. "The only difference was that they were white and we were black. She said that we were not American, that we needed to go back to where we belong from, she said we pay to be here."
The two alerted the employee on duty who explained that the area where Campbell was sitting is public property.
"They can sit there. Do you want me to call my manager?" the employee can be heard saying on the video.
Campbell, a first-generation U.S. citizen and Skokie resident, believes this was a racially-motivated incident.
On the video, Donoshaytis asks Campbell: "Do you want to kill me?"
He responds: "No. Why would I want to kill you? Is it because I am Black?"
"Yes," Donoshaytis said.
The argument turned physical when Campbell said Donoshaytis hit him.
"Irene turned around and hit me twice - multiple times - on camera," he said.
Winnetka police responded, and the 65-year-old was arrested and charged with battery at the time.
"She was still saying, we 'cannot be there,' still saying that we 'needed passes,' while being handcuffed - all happening while people were coming to the pier," Campbell said.
Campbell said the woman's actions were hurtful, and he wishes she would have just left them alone.
The battery charges were dropped Monday, and the hate crime charge was filed Wednesday.