Unfortunately the interest on this tax is not deductable.
It is not ad volarum tax so the interest is not also.
Special assessments generally are not deductible. For individual income tax purposes, property owners who claim itemized deductions may deduct state and local property taxes in determining federal and state taxable income. However, property taxes that provide specific benefits that tend to increase the value of the property may not be deducted.
Federal individual income tax instructions specify that property taxes may be deducted if the tax is based on the assessed value of the real property and the tax is assessed at a uniform rate on all property in the jurisdiction. The instructions further specify that to be deductible "the tax must be for the welfare of the general public and not be a payment for a special privilege granted or service rendered to you" [the taxpayer].
Property taxes may not be deducted if the taxes are charges for services or assessments for local benefit. Which these special assessments are determined to be.
Now your question is on the interest itself. but in order for the interest to be deductable it must be on a loan that is secured by the property.
since a special assessment is not a loan, though it may be debt or obligation, the interest is not deductable.
IN actualit there is nothing in regulation that addresses this category of interest per se. this leaves the door open to obtain a letter ruling from the IRS.
I understand your potential contention. The special assessment is for improvements that will increase property value. So then the interest you are thinking must be tax deductable. However this interest does not meet the basic requirement in that it is not attached to a loan.