Smith,

"The hardest fruit to eat is the one you don't have."
So, why don't you tell Xavier your feeling towards Katie and tell Katie your feelings towards her. If he is your best friend you will not loose him and if she is sensible and realise the truth she will take action.
Will there be a happy ending? Time will tell.
Meanwhile, I suggest to keep searching for someone whose feeling is mutual.
As I see it, Katie is not a good catch.
Good luck.